JOINT DTI-DOF-BOC-BIR
ADMINISTRATIVE ORDER NO. 01 Series of 2004
SUBJECT:
REVISED RULES AND REGULATIONS IMPLEMENTING R.A. NO. 8502,
OTHERWISE KNOWN AS,
THE “JEWELRY INDUSTRY DEVELOPMENT ACT OF 1998”
Pursuant to Section 6 of R.A. No. 8502, otherwise known as the Jewelry Industry
Development Act of 1998, these Revised Rules and Regulations simplify,
consolidate, and amend the Implementing Rules and Regulations of R.A. No. 8502,
superceding DTI-BOI Rules and Regulations Implementing R.A. No. 8502, BIR
Revenue Regulation 1-99, Joint DOF-BOC Order No. 1-99, and Joint BIR-BOC Order
No. 1-99.
Rule I
BASIC GUIDELINES
Section 1. Declaration
of Policy. Recognizing that the
jewelry industry has the potential for more employment generation, enhance tax
collection efficiency, increase the industry linkages with the other sectors of
the economy, and to increase our foreign exchange earnings through exports and
import substitutes, it is hereby declared to be the policy of the State to
support, promote and encourage the growth and development of the predominantly,
small and medium scale jewelry industries. Toward this end, the State shall
undertake to encourage the development of the jewelry industry by:
(a)
Promoting and encouraging local
jewelers to join the formal sector by making the jewelry industry sector a
partner in the task of building up the small and medium enterprises through the
establishment of an adequate support structure and the creation of a business
environment conducive to the viability, legalization and development of the
jewelry sector;
(b)
Adopting appropriate tax
incentives and programs necessary for the acceleration and growth of the
industry; and
(c)
Promoting and institutionalizing
the effective promotion and participation of associations of the jewelry
industry and cooperatives particularly in the advancement of the skills and
craftsmanship of Filipino workers therein.
Section 2. Designation of Agencies.
The Board of Investments (BOI) is hereby
designated by the Department of Trade and Industry (DTI) to assist the latter in
the monitoring, overseeing and supervision related to the implementation of
Republic Act No. 8502 and its Rules and Regulations. The Bureau of Customs (BOC)
and the Bureau of Internal Revenue (BIR) are likewise designated by the
Department of Finance (DOF) to implement the grant of development incentives
under Section 3 (a), (b), (c), (d) and (h) of R.A. No. 8502.
Section 3. Construction.
These Rules shall be liberally construed in
order to promote its objectives and to ensure a speedy process of accreditation
and availment of development incentives by Qualified Jewelry Enterprises.
Rule II
DEFINITION OF TERMS
Section 1.
For the purposes of Republic Act No. 8502 and these Rules and
Regulations, the terms used herein shall be construed to have the following
meaning:
(a)
“Accreditation” – shall mean the
process by which the Board of Investments determines the eligibility of
applicant jewelry enterprise for the assistance, counseling, and other
incentives provided under R.A. No. 8502; and applicant jewelry association for
the endorsement of its members for accreditation under the Act.
(b)
“Act” – shall mean the Jewelry
Industry Development Act of 1998 (R.A. No. 8502).
(c)
“Annual Business Plan” – shall
refer to the document submitted by the enterprise applying for accreditation
under the Act and these Rules, which indicates the proposed imported and local
acquisition of raw materials / supplies, machinery and equipment, tools and
spare parts, as well as the projected production and sales covering its year of
accreditation.
(d)
“Assaying” – shall mean the
determination of precious metal content in jewelry or precious metal alloys used
for jewelry.
(e)
“Base Metals” – shall mean iron
and steel, copper, nickel, aluminum, lead, zinc, tin and their articles thereof,
and other base metals and their articles as defined in Section XV of the Tariff
and Customs Code of the Philippines, as amended.
(f)
“Bill of Lading” – shall refer to
the document issued by a carrier to a shipper, signed by a captain, agent, or
owner of a vessel, furnishing written evidence regarding receipt of articles
(cargo), the conditions on which transportation is made (contract of carriage),
and the engagement to deliver goods at the prescribed port of destination to a
lawful holder of the bill of lading, as well as proof of ownership or title to
the goods.
(g)
“BIR” – shall mean the Bureau of
Internal Revenue.
(h)
“Board” or “BOI” – shall mean the
Board of Investments.
(i)
“BOC” – shall mean the Bureau of
Customs.
(j)
“BPS” – shall mean the Bureau of
Product Standards.
(k)
“CDA” – shall mean the Cooperative
Development Authority.
(l)
“Certificate of Accreditation” –
shall refer to the evidence issued by the Board attesting to the compliance of
an applicant with all the qualifications for accreditation, and which shall
serve as a proof of the registration of the applicant with the Board for the
activity/ies so accredited. The Certificate of Accreditation shall be valid for
one (1) year and renewable thereafter upon compliance with the requirements set
under these Rules.
(m)
“Commercial Invoice” – shall refer
to the document issued by an exporter to signify sales. This document
identifies the seller and buyer of articles, invoice number, date, shipping
date, mode of transport, delivery and payment terms, and a complete listing and
description of the articles sold including prices, discounts, and quantities.
(n)
“Cutting” – shall mean the process
of shaping precious stones on revolving diamond charged or other abrasive
grinding wheels.
(o)
“Date of Accreditation” – shall
mean the date when the Certificate of Accreditation is issued after the
completion of the Board’s evaluation of the applicant for accreditation.
(p)
“Date of Official Acceptance” –
shall mean the date stamped on the application and recorded in the Record of
Application Book of the Board. However, for applications for accreditation
filed with the BOI Extension Offices, the date of official acceptance, in
relation to the ten (10) working day period for automatic approval, shall be the
date the application is recorded in the Record of Application Book of the Board
until such time that the extension offices are fully equipped to accept and
process the applications.
(q)
“DOF” – shall mean the Department
of Finance.
(r)
“DTI” – shall mean the Department
of Trade and Industry.
(s)
“Electroplating” – shall mean the
process of depositing a layer of metals on to a conductive surface through the
use of electricity.
(t)
“Exclusive use of jewelry inputs,
machinery and equipment” – shall refer to the employment, application, use or
consumption by a Qualified Jewelry Enterprise of jewelry inputs, machinery and
equipment acquired with incentives under this Act, solely for the purpose of
manufacturing jewelry or any aspect of such manufacturing process.
(u)
“Fine Jewelry” – shall mean:
(1)
Articles of personal adornment
made of precious metals, stones, pearls or combinations thereof (for example:
rings, bracelets, necklaces, brooches, earrings, watch-chains, fobs, pendants,
tie pins, cuff links, combs, tiaras, dress-studs, religious or other medals and
insignia); and
(2)
Articles made of precious metals,
with or without stones for personal use of a kind normally carried in the
pocket, handbag or in the person (for example: cigarette cases, powder boxes,
chain purses, cachou boxes).
(v)
“Forming” – shall mean the generic
terms for the processes used in shaping precious metals and imitations thereof
such as bending, dapping, chasing, repousse, sinking, hammering, with or without
stakes, using stamps and dies, forging, fusing and engraving.
(w)
“Imitation jewelry” – shall mean
articles falling under item (u) (1) but not including buttons, dress-combs,
hair-slides or the like, or hairpins, not incorporating natural or cultured
pearls, precious or semi-precious stones nor precious metal or metal clad with
precious metal, except as plating or as minor constituents.
(x)
“Imitation of precious stone” –
shall mean any man-made reproduction, copy, imitation, likeness and semblance of
any of the aforementioned stones, processed, manufactured, or done in any method
or procedure.
(y)
“Imitation of precious metal” –
shall mean non-precious metal electroplated to simulate precious metals.
(z)
“Import Incentives Availment
Report” or “IIAR” – shall mean a document issued by the Board carrying a serial
number, together with the Certificate of Accreditation, which shall be presented
to the BOC upon every tax and/or duty free importation by Qualified Jewelry
Enterprise. The document shall contain pertinent information on actual import
incentives availment by Qualified Jewelry Enterprise, such as (i) Approved
Projected Value of Importation, (ii) HS Code, (iii) Description, (iv) Quantity,
(v) CIF Value, (vi) Duty Rate, (vii) Value of Exemption, (viii) Designated
Port/s, (ix) Date of Arrival, and (x) Bill of Lading/Airway Bill Number, among
others.
(aa)
“Jewelry Enterprise” – shall mean
an enterprise engaged in any aspect involved in the manufacture of jewelry,
which includes, among others:
(1)
Manufacture of fine jewelry;
(2)
Manufacture of imitation jewelry;
(3)
Cutting and polishing, forming of
precious stones or in producing imitations thereof;
(4)
Pearl farming, pearls culturing,
and in the production of imitation pearls;
(5)
Refining and/or forming of
precious metals and/or imitations of precious metals; manufacture of articles
made of precious metals utilizing goldsmithing and/or silversmithing techniques;
manufacture and/or processing of other raw materials and parts used in the
manufacture of jewelry; and
(6)
Activities in support of qualified
jewelry enterprise, such as electroplating, precious stone appraisal and
certification, assaying and refining, and subcontracting to another qualified
jewelry enterprise.
(bb)
“Other raw materials used in the
manufacture of jewelry” – shall mean:
(1)
Raw materials, supplies and other
materials such as, but not limited to: clasps, chains in spools, wires, sheets,
findings, settings, rubber molds, cleaning solution, soldering pads, binding
wires, points wheel, and sharpening stones; and
(2)
Consumable materials, such as, but
not limited to: injection waxes, investment powders, fluxes, solders, enamels,
electroplating materials and polishing compound.
(cc)
“PERD” – shall mean the Project
Evaluation and Registration Department of the BOI.
(dd)
“Polishing” – shall mean the
process of smoothening and shining the surface of metals for jewelry making or
precious stones for lapidary.
(ee)
“Precious/fine metals” – shall
mean gold, silver, platinum, palladium, rhodium, ruthenium, iridium, and
osmium. These include alloys of precious metals, solders and plating chemicals
such as rhodium and palladium plating solutions and potassium gold cyanide and
potassium silver cyanide and silver cyanide in salt solution.
(ff)
“Precious stones” – shall mean
diamond, ruby, emerald, sapphire, opal, amethyst, beryl, topaz, garnet that are
used in jewelry making, including those formerly classified as semi-precious
stones.
(gg)
“Precious stone appraisal and
certification” – shall mean the examination of precious stone to determine its
quality (i.e., cut, clarity, color and carat) and estimated market value.
(hh)
“SEC” – shall mean the Securities
and Exchange Commission.
(ii)
“SMD” – shall mean the Supervision
and Monitoring Department of the BOI.
(jj)
“Qualified Jewelry Enterprise (QJE)”
– shall mean any natural or juridical entity, either a single proprietorship,
cooperative, partnership, or corporation, organized and existing under
Philippine laws, which is issued a BOI accreditation under R.A. No. 8502 and its
Implementing Rules and Regulations.
(kk)
“Record of Application Book of the
Board” – shall mean the Record of Application for Accreditation Book under R.A.
No. 8502 especially evolved for purposes of the Act, wherein the name of the
applicant shall be recorded and the corresponding date of the official
acceptance of the application are so consecutively entered. This is to be
differentiated from the Accreditation Book, which contains the names of all
Qualified Jewelry Enterprises, and their corresponding dates of accreditation
and renewal of accreditation.
(ll)
“Refining” – shall mean methods of
purifying precious metals from its impurities up to 99.99% purity.
(mm)
“Subcontracting” – shall mean the
act of entering into an agreement with another qualified jewelry enterprise
engaged in jewelry manufacturing to perform any or specified part of the
manufacturing process.
(nn)
“TESDA” – shall mean the Technical
Education and Skills Development Authority.
Section 2.
The Explanatory Notes of the Harmonized Commodity Description and Coding
System, including the General Rules for Interpretation of the Harmonized System,
provided under Section 103 of the Tariff and Customs Code of the Philippines,
shall be the point of reference in case question arises on the correctness and
accuracy of the definition of terms with respect to articles of jewelry.
Rule III
Development Incentives to QUALIFIED
JEWELRY Enterprises
Section 1. Development Incentives.
The following incentives shall be available to
Qualified Jewelry Enterprises:
(a) Entitlement to zero (0) duty on
imported raw materials, which include precious/fine metals, loose gems, precious
stones, jewelry parts, accessories, and supplies for use by Qualified Jewelry
Enterprise as specifically mentioned
in Chapter 5 of Section I, Chapter 12 of Section II, Chapters 25, 26 and 27 of
Section V, Chapters 28, 34 and 38 of Section VI, Chapter 70 of Section XIII,
Chapter 71 of Section XIV, Chapter 83 of Section XV, and Chapter 96 of Section
XX of the Tariff and Customs Code, as amended. These raw materials are
enumerated in Annex “A” hereto attached and made an integral part hereof;
(b)
Exemption from the imposition of
excise tax on all goods commonly or commercially known as jewelry, whether real
or imitation pearls, precious and semi-precious stones and imitation thereof;
all goods made of, or ornamented, mounted or fitted with precious metals or
imitations thereof, as specifically mentioned in Section 150 (a) of the National
Internal Revenue Code of the Philippines, as amended, and enumerated in Annex
“C” hereto attached;
(c)
Entitlement to zero (0) duty on
imported capital equipment, including spare parts and tools thereof falling
within Chapter 69 of Section XIII, Chapter 82 of Section XV, Chapters 84 and 85
of Section XVI and Chapter 90 of Section XVIII of the Tariff and Customs Code as
amended, and enumerated in Annex “B” hereto attached;
(d) Additional deduction from taxable
income of fifty percent (50%) of expenses incurred in training schemes approved
by the appropriate agency and which shall be deductible during the financial
year the expenses were incurred;
(e) Gold and silver sales by the
Bangko Sentral ng Pilipinas under minimal margins;
(f) Authority to buy gold and silver
directly from other sources without any specific authority from the Bangko
Sentral ng Pilipinas. However, this shall not include sale of gold and silver
from small-scale miners, which, as mandated by R.A. No. 7076, People’s Small
Scale Mining Act of 1991, are required to be sold to the Bangko Sentral ng
Pilipinas;
(g) Inclusion of locally manufactured
jewelry products in the government’s tourist duty free shops, including the
promotion, advertisement, and sale of jewelry products; and
(h) Qualified Jewelry Enterprise
availing of incentives provided under the Act and these Rules shall still be
eligible to incentives provided for by other special laws such as:
(1)
Republic Act No. 7844 (Export
Development Act of 1994)
(2) Republic Act No. 7916 (Special
Economic Zone of 1995)
(3) Executive Order No. 226 (BOI
Omnibus Investment Code)
Provided that, the jewelry enterprise shall
register under the aforestated laws, or that the activity is export-oriented,
and that there is no double availment of the same incentives.
Rule IV
COVERED ARTICLES
Section 1.
The articles specifically listed in Annex “A” hereof, classified under
Section 104 of the Tariff and Customs Code of 1978, as amended, which are
jewelry raw materials and supplies, shall be accorded zero percent (0%) duty on
their importation by Qualified Jewelry Enterprise.
Section 2.
The articles specifically listed in Annex “B” hereof, classified under
Section 104 of the Tariff and Customs Code of 1978, as amended, which are
machinery, equipment, tools and/or spare parts used in the manufacture of
jewelry, shall be accorded zero percent (0%) duty on their importation by
Qualified Jewelry Enterprise.
Section 3.
The articles specifically listed in Annex “C” hereof, classified under
Section 104 of the Tariff and Customs Code of 1978, as amended, which are
jewelry raw materials and supplies covered under Section 150 (a) of the National
Internal Revenue Code of the Philippines, shall be accorded zero percent (0%)
excise tax on their importation by qualified jewelry enterprise.
Section 4.
The Board of Investments, Department of Finance, Bureau of Customs,
Bureau of Internal Revenue, in consultation with concerned private sector and
other government institutions, shall conduct an annual review of the attached
Annexes “A”, “B”, and “C” covered by the above Sections 1, 2 and 3,
respectively.
Rule V
QUALIFICATIONS FOR ACCREDITATION
Section 1. Specific Qualifications of Jewelry
Enterprise.
To be entitled to
accreditation under the Act and these Rules, an applicant must comply with the
pertinent qualifications provided herein:
(a)
It is either a single
proprietorship, cooperative, corporation, partnership, or organization
established and duly authorized to do business under Philippine laws;
(b)
In case the applicant is a
corporation, the area of activity in which it is engaged or proposing to engage
is within its corporate purposes as indicated in its Articles of Incorporation;
(c)
It has secured a Mayor’s Permit or
City/Municipal Business Permit;
(d) It has secured appropriate BIR
Registration;
(e) It is endorsed by a duly
accredited jewelry association certifying membership of good standing; and
(f) It is engaged or proposing to
engage in any of the activities of a jewelry enterprise as defined in Rule II of
these Rules. For activities in support of jewelry manufacturing, the following
qualifications are further required:
(1)
For Assaying – the accredited
firm/facility shall secure accreditation from and shall adopt the standards to
be set by the Bureau of Product Standards (BPS).
(2) For Precious Stone Appraisal and
Certification – precious stone appraisal and certification shall be based on the
standards and accreditation to be set by the BPS.
(3) For
Subcontracting of Jewelry Manufacturing – the jewelry enterprise shall enter
into an agreement with another Qualified Jewelry Enterprise engaged in jewelry
manufacturing to perform any or specified part of the manufacturing process.
Section 2. Specific Qualifications of Jewelry
Association –
the following
qualifications are required:
(a)
It must be duly registered with
the SEC;
(b) It must be at least one (1) year
in existence for member of the Confederation of Philippine Jewelers, Inc.,
otherwise, the jewelry association must be at least three (3) years in
existence; and
(c)
It must have at least ten (10)
active members.
Rule VI
REQUIREMENTS AND PROCEDURES FOR ACCREDITATION
Section 1. New Application for Accreditation:
Documents to be Submitted –
To be
entitled to accreditation under the Act and these Rules, an applicant must
submit all of the following to the Board:
(a)
For Jewelry Enterprise
(1)
Duly notarized application form
for accreditation (Form RA 8502-1), Annual Business Plan,
location map and plant layout for each and every place of production;
(2)
DTI Business Name registration
(for single proprietorship) / SEC Registration and Articles of Incorporation and
By-Laws (for partnership, corporation
and organization) / CDA Registration (for cooperative);
(3)
Certificate of Registration with
the BIR;
(4)
Certificate of Registration for
Importers issued by the Customs Intelligence and Investigation Service (CIIS) of
the BOC;
(5)
Mayor’s Permit or City/Municipal
Business Permit;
(6)
Endorsement from a duly accredited
jewelry association certifying membership of good standing;
(7)
Duly notarized certification by
the enterprise of its total assets (for newly- formed enterprise);
(8)
Income Tax Return (ITR) duly filed
with the BIR with attached Audited Financial Statement (for existing
enterprise); and
(9)
Sworn statement that it shall
exclusively use the jewelry inputs, machinery and/or equipment acquired with
incentives under this Act for jewelry manufacturing.
(b)
For Jewelry Association
(1)
Duly notarized application form
for Accreditation (Form R.A. 8502-2);
(2)
List of active members including
their contact person, office and plant addresses, telephone and fax numbers;
(3)
Annual Information Return duly
filed with the BIR, including attachments, if any; and
(4)
Accomplishment / Annual Report for
the past one (1) or three (3) years for member and non-member of the
Confederation of Philippine Jewelers, Inc., respectively, indicating its
activities, programs and projects.
Section 2. Renewal of Accreditation: Documents
to be Submitted -
To be entitled to a
renewal of the Certificate of Accreditation under the Act and these Rules, an
applicant must submit all of the following to the Board:
(a)
For Jewelry Enterprise
(1)
Duly notarized application form
for Accreditation (Form R.A. 8502-1), Annual Business Plan, location map and
plant layout for each and every place of production;
(2)
Annual Report on Actual Operations
ending calendar/fiscal year (BOI Form S-1 (RA 8502));
(3)
Original copy of the Import
Incentives Availment Report indicating importations made with incentives during
the previous year;
(4)
Income Tax Return (ITR) duly filed
with the BIR with attached Audited Financial Statement (AFS);
(5)
Endorsement from a duly accredited
jewelry association certifying membership of good standing;
(6)
Certificate of Registration with
the BIR;
(7)
Mayor’s permit or City/Municipal
Business Permit;
(8)
Sworn statement that is shall
exclusively use the jewelry inputs, machinery and/or equipment acquired with
incentives under this Act for jewelry manufacturing; and
(9)
All documentary requirements
necessary for the availment of excise tax exemption, as may be required by the
BIR, shall be submitted to the Board as additional requirements for the renewal
of accreditation, such as, but not limited to, proof of payment of the annual
registration fee with the BIR and copies of all excise tax returns for
tax-exempt activities, as well as taxable activities, if any, for the
year/period covered by the previous accreditation.
(b)
For Jewelry Association
(1)
Duly notarized application form
for Accreditation (Form R.A. No. 8502-2);
(2)
List of active members including
their contact person, office and plant addresses, telephone and fax numbers;
(3)
Annual Information Return duly
filed with the BIR, including attachment, if any; and
(4)
Accomplishment / Annual Report for
the previous year, indicating its activities, programs and projects.
Section 3. Procedures for Accreditation under
R.A. No. 8502.
Any jewelry
enterprise / association, which has all the qualifications under Rule V, may be
accredited under R.A. No. 8502, in accordance with the following procedures:
(a)
The applicant shall file two (2)
sets of duly notarized application form, complete with the documentary
requirements, as listed under Sections 1 and 2 of Rule VI, with the PERD or BOI
Extension Office. Whenever appropriate, the Board may require submission of
additional supporting documents.
(b)
PERD or BOI Extension Office shall
evaluate the application for accreditation by, among others, verifying the
documents submitted by the applicant jewelry enterprise and conducting an ocular
inspection of the production premises. It
shall prepare and accomplish an evaluation sheet, which shall be the basis
for the issuance or non-issuance of
the Certificate of Accreditation. The evaluation sheet shall contain the
approved projected value of importation of the applicant based on its assets,
approved Annual Business Plan and operational performance, as the case may be.
(c)
Upon approval by the PERD or BOI
Extension Office, the application is officially filed with the Registration
Division and recorded in the Records Application Book of the Board. Applicant
pays the accreditation fee to the BOI cashier.
Application received and evaluated by BOI
Extension Office shall be forwarded to the BOI Head Office within 48 hours from
receipt and will be considered officially accepted upon payment of the
accreditation fee and recorded in the Record of Application Book of the Board.
The applicant shall shoulder the cost of mailing or delivery charges covering
the transmittal of its application from the BOI Extension Office to the BOI Head
Office.
(d)
Registration Division prepares the
Certificate of Accreditation and the Import Incentives Availment Report for
signatures by the PERD Officers and the duly designated Executive Director.
(e)
Registration Division logs the
name of Qualified Jewelry Enterprise, Certificate of Accreditation No., amount
of investment and the date of accreditation or renewal of accreditation in the
Accreditation Book.
(f)
The Certificate of Accreditation
and the Import Incentives Availment Report, together with the approved Annual
Business Plan, shall be issued to the applicant within ten (10) working days
from the date of official acceptance.
Section 4. Amendments to the Annual Business Plan
(a) For any changes in the annual
business plan that will exceed the projected value of importation, brought about
by reasons such as, but not limited to, increase in demand, demand for new
products, adoption of new technology, etc., the Qualified Jewelry Enterprise
shall file a formal request to the Board, together with a revised business plan
and documents to prove its justifications thereof.
(b)
The approval or disapproval of the
request shall be based on the justifications and the proofs submitted by the
Qualified Jewelry Enterprise.
(c)
Upon approval of the request, PERD
shall prepare an approval letter for signature by the Executive Director.
(d)
PERD shall issue the approval
letter indicating the new projected value of importation by the Qualified
Jewelry Enterprise. PERD shall immediately provide copies of approval letter
and the revised Business Plan to DOF, BOC, BIR and SMD.
Section 5.
Reporting.
PERD shall
prepare a report to the Board, as often as necessary, on the approved
accreditations and the amount of investments. PERD shall provide copies of the
Certificate of Accreditation and the Import Incentives Availment Report,
together with the approved Annual Business Plan, as well as the annual report on
actual operations, to the DOF, BOC,
BIR and SMD within five (5) days upon their
issuance.
Rule VII
PROCEDURES FOR THE RELEASE OF TAX- AND DUTY-FREE
IMPORTED ARTICLES
Section 1. Import Procedures with the BOC
(a)
Upon filing of the Import Entry
Declaration, the Qualified Jewelry Enterprise shall present the following
documents to the Customs Collector at the port of entry:
(1)
Commercial Invoice;
(2)
Bill of Lading;
(3)
BOI Certificate of Accreditation
under R.A. No. 8502;
(4)
Import Incentives Availment Report
with attached approved Annual Business Plan, including amendments thereto duly
approved by the Board; and
(5)
Such other documents as may be
required by BOC pursuant to laws, rules and regulations as may hereinafter be
issued.
(b)
The Customs Collector shall verify
if the importation is included in Annex “A”, “B” or “C” of this Order.
(c)
The Customs Collector shall record
in the Import Incentives Availment Report all pertinent information on the
importation.
(d)
The Customs Collector shall check
that the cumulative amount of importation does not exceed the approved Projected
Value of Importation.
(e)
The Import Incentives Availment
Report (IIAR) shall be accomplished in duplicate by the Collector of the port or
his duly authorized representative. The original copy shall be given to the
Qualified Jewelry Enterprise, and the duplicate shall be retained by the BOC.
(f)
In case the cumulative value of
importation exceeds the BOI-approved Projected Value of Importation, the Customs
Collector shall require the Qualified Jewelry Enterprise to submit a duly
approved new projected value of importation and revised business plan by the BOI
under Section 4 of Rule VI. Otherwise, the Qualified Jewelry Enterprise shall
pay the appropriate taxes and duties on the amount of importation in excess of
the BOI-approved value of importation.
(g)
The BOC shall release the tariff
and/or excise tax free inputs, machinery and equipment, tools and spare parts,
in accordance with Rule IV, Sections 1, 2, and 3.
Section 2. Reporting.
The Bureau of Customs (BOC) shall provide the
BOI, DOF and BIR with a quarterly report on the import incentives availment
(duty exemption and/or excise tax exemption), including taxes (value added tax,
excise taxes) and duties paid by Qualified Jewelry Enterprises. The BOC shall
likewise provide these offices with an annual report on the taxes and duties
paid on the importations by all jewelry enterprises.
Rule VIII
PROCEDURES IN THE AVAILMENT OF ADDITIONAL
DEDUCTION FOR TRAINING EXPENSE
Section 1. Additional Deduction for Training
Expense. A Qualified Jewelry
Enterprise providing training to its employees may avail of the additional
deduction equivalent to fifty percent (50%) of the expenses incurred in training
schemes for the purpose of computing the net taxable income. The said fifty
percent (50%) deduction shall be in addition to the allowable ordinary and
necessary expenses on training actually incurred by the enterprise during the
taxable year.
Section 2. Conditions for the Availment of the Tax Incentive
(a)
A qualified jewelry enterprise
must submit to the BIR a certified true copy of its Certificate of Accreditation
issued by the BOI.
(b)
The training schemes must be
approved by the Technical Education and Skills Development Authority (TESDA).
TESDA must certify as to the description
(objectives, type of training to be given, course syllabus, among others) and the cost of the training program. TESDA must
likewise certify that the training program was actually conducted and was
instrumental to the acquisition of appropriate skills by recipient trainees
employed in the Qualified Jewelry Enterprise. A certification from TESDA as to
the accreditation of, and the actual conduct of the training program must be
secured and shall be attached to the enterprise’ income tax return (ITR)
covering the taxable quarter / year the training programs were conducted. A
summary report shall be attached thereto containing the detailed format on the
actual cost of every training and aggregate training expenses incurred within
the taxable period. For every training conducted, a corresponding TESDA
certification shall be issued.
In-house training conducted by the Qualified
Jewelry Enterprise should also be accredited and approved by TESDA. All the
aforementioned documents supporting the proof of training(s) undertaken by the
enterprise shall likewise be attached to the ITR.
Section 3. Period considered for Tax
Deduction.
The additional deduction
from training expenses shall be claimed in the taxable year in which the
training expenses have been incurred.
Section 4. Documentary Requirements.
The tax deduction may be availed of by the
qualified jewelry enterprise upon filing of the quarterly / final income tax
return accompanied with the following supporting documents to the BIR:
(a)
Certified true copy of BOI
Accreditation;
(b) Certification from TESDA as to the
registration of the training program,
its description, the cost of the said training program, and the actual conduct
of training;
(c)
Official receipts of training
expenses; and
(d)
Summary report containing details
of the actual cost of every training and aggregate training expense incurred
within the taxable year.
Rule IX
SUPERVISION AND MONITORING
Section 1. Supervision and Monitoring of Qualified Jewelry Enterprises
(a)
The Qualified Jewelry Enterprise
shall secure prior approval from the Board on any changes in the location and
plant layout of the production premises, as well as the establishment of
additional place of production and/or retirement of existing production
premises.
(b)
SMD shall supervise and monitor
all Qualified Jewelry Enterprises as to their compliance with all the conditions
set forth in their accreditation as such, and shall recommend appropriate
sanctions and penalties for violations committed under the Act and these Rules.
(c) PERD shall forward copies of
annual reports, AFS and ITR of the Qualified Jewelry Enterprise to SMD, which
shall be the bases for its supervision and monitoring activities.
Section 2. Submission of Annual Reports and Transcript Sheets of Official
Register Books
(a)
The Qualified Jewelry Enterprise
shall submit an Annual Report on Actual Operations using BOI Form S-1 (R.A.
8502) within one (1) month after the end of the calendar/fiscal year. The annual
report shall provide information on the following: (i) Employment Benefits; (ii)
Incentives availed under R.A. 8502; (iii) Taxes/fees paid to the government;
(iv) Performance in terms of production and sales; (v) Cost of production; (vi)
Actual utilization of raw materials and supplies imported with incentives under
R.R. 8502, among others.
(b)
The Qualified Jewelry Enterprise
shall submit to the Board the transcript sheets of the Official Register Books
(ORB), prepared on a monthly basis, within one (1) month after the end of the
calendar/fiscal year.
Section 3.
Jewelry Enterprise Also Engaged in Exciseable Activities. All laws, Rules
and Regulations governing excise taxation shall be enforced by the BIR, and
shall be complied with by any Qualified Jewelry Enterprise on its activity, if
any, that is not covered by the tax incentives granted under the Act.
Section 4. Conditions for Continued Availment of Incentives
(a)
Annual Accreditation – for
purposes of continued availment of incentives, all jewelry enterprises shall
apply for renewal of accreditation with the Board within forty-five (45) days
before the date of expiration, as indicated in the Certificate of Accreditation.
(b)
Visitorial Powers – the enterprise
shall allow authorized representatives of the BOI to inspect and examine its
premises, its Books of Accounts, and other pertinent records and documents to
ascertain compliance with these Rules.
(c)
Separate Book of Accounts for
Accredited Jewelry Manufacturing – the enterprise shall maintain a separate Book
of Accounts / Accounting System for its accredited jewelry manufacturing
activities.
Rule X
REQUIREMENT TO KEEP BOOKS OF ACCOUNTS, OFFICIAL REGISTER BOOKS AND OTHER
RECORDS
Section 1.
All Qualified Jewelry Enterprises availing of tax incentives under R.A.
No. 8502 shall keep books of accounts, including the Official Register Books
(ORB), and other pertinent records pursuant to the provisions of the National
Internal Revenue Code of 1997 and its Implementing Revenue Regulations. These
records and the actual operations of the enterprise shall be subject to
inspection and verification by duly authorized revenue officer for the purpose
of ascertaining compliance with the conditions under which they have been
granted the tax incentives, and their tax liability, if any.
Rule XI
REPORTING AND REVIEW
Section 1.
BIR shall provide the BOI with an annual report of tax collections on the
industry-wide basis, such as income
tax, excise tax and VAT paid by all jewelry enterprises.
Section 2. DTI/BOI
shall submit to BIR the transcript sheets of the ORB, prepared on a monthly
basis, within one (1) month after the end of calendar/fiscal year of operation
of the Qualified Jewelry Enterprise.
Section 3.
DTI/BOI shall submit an annual consolidated Report to Congress on the
implementation of the Act as provided under Section 5 thereof. DOF, BIR and BOC
shall likewise be provided with such report.
Section 4.
DTI/BOI shall provide the BIR with copies of documents submitted by
Qualified Jewelry Enterprises.
Section 5.
The parties herein shall periodically meet, or as the need arises, in order to
review these Rules and to introduce amendments thereto, if necessary.
Rule XII
SYNCHRONIZED GOVERNMENT SUPPORT
Section 1.
All departments, bureaus, agencies or instrumentalities of the government
are enjoined to extend the necessary assistance to Qualified Jewelry Enterprises
to ensure the implementation of the Act in a synchronized manner and achieve the
objectives thereof.
Rule XIII
EFFECTS OF WITHDRAWAL FROM BUSINESS OR
SUSPENSION OF OPERATIONS
Section 1. Effect of
Non-implementation of Project Timetable.
In case a Qualified Jewelry Enterprise incurs a
delay of six (6) months in the implementation of its project timetable, the
Board shall, upon due notice, automatically cancel the Certificate of
Accreditation. The enterprise shall surrender its Certificate of Accreditation
and the IIAR within fifteen (15) calendar days from receipt of the notice of
automatic cancellation.
Section 2. Withdrawal from Business;
Cessation of Operations.
Whenever a
Qualified Jewelry Enterprise decides to withdraw from business or suspend its
operations for at least six (6) months, a written notice thereof shall be sent
to the Board before the decision is implemented.
Withdrawal from business operations for more than six months shall cause the
automatic cancellation of the Certificate of Accreditation, which shall then be
surrendered to the Board, together with the IIAR, within the period specified in
Section 1 hereof. Upon such withdrawal, the enterprise shall cease to be
entitled to the incentives provided under the Act and these Rules.
The effect of withdrawal from business or suspension of operations in the
accredited activity shall, in each particular instance, be determined by the
Board, taking into account the reasons thereof and the condition of the
Qualified Jewelry Enterprise. The Board may, in appropriate cases, require the
payment of incentives in whole or in part, with or without interest or
penalties.
Rule XIV
SANCTIONS
Section 1. Grounds for
Cancellation of Accreditation.
Certificate of Accreditation issued under the Act and these Rules shall be
suspended or cancelled for any of the following grounds:
(a)
Failure to maintain the
qualifications of a Qualified Jewelry Enterprise or accredited association;
(b)
Violation of any provision of the
Act and these Rules;
(c)
Violation of the terms and
conditions specified in the Certificate of Accreditation, or orders issued by
the Board; and
(d)
Violation of any law for the
protection of the environment as determined by the appropriate government
agency.
Section 2. Grounds for Suspension of
Incentives.
For the same grounds
enumerated in the immediately preceding section, the Board may suspend the
enjoyment of one or more incentives enjoyed by a Qualified Jewelry Enterprise
depending upon the gravity of the offense committed.
Section 3. Violation of Other Laws.
Acts of violation by Qualified
Jewelry Enterprises of the National Internal Revenue Code, as amended, the
Tariff and Customs Code, as amended, the Labor Code and such other applicable
laws shall be subject to the penalties provided under said laws.
Section 4.
The BOI shall immediately notify the DOF, BIR and BOC of the cancellation
or suspension of the Certificate of Accreditation of the jewelry enterprise.
Rule XV
APPEAL
Section
1. Administrative Appeal and
Review. All decisions of the Board under this Act may be appealed to the
Office of the President within fifteen (15) days from receipt of the decision,
otherwise the same shall become final and executory. Where an appeal has been
perfected, such decision shall become final and executory ninety (90) days after
the perfection of the appeal unless reversed.
Section
2. Judicial Review.
The aggrieved
party may seek a review of the Board’s decision by filing an appropriate
petition with the Court of Appeals.
Rule XVI
FEES
Section 1.
The Board shall collect the following accreditation fees, which are based
on the following categories of an enterprise, as defined by Small and Medium
Enterprise Development Council (SMEDC), and are subject to amendment as approved
by the Board:
(a)
New Application
(1) Micro enterprise
P1,500
(2) Small scale
enterprise P3,000
(3) Medium scale enterprise P4,500
(4) Large scale
enterprise P6,000
(b)
Application for Renewal of
Accreditation
(1) Micro enterprise P750
(2) Small scale
enterprise P1,500
(3) Medium scale enterprise P2,250
(4) Large scale
enterprise P3,000
Rule XVII
REPEALING CLAUSE
Section 1. Repealing Clause.
All administrative orders, rules and
regulations, or parts thereof, including DTI-BOI Rules and Regulations
Implementing R.A. No. 8502, BIR Revenue Regulation 1-99, Joint DOF-BOC Order No.
1-99, and Joint BIR-BOC Order No. 1-99, which are inconsistent with the
provisions of these Rules and Regulations are hereby repealed, amended, or
modified accordingly.
Rule XVIII
EFFECTIVITY
Section 1.
These Implementing Rules and Regulations shall take effect fifteen (15)
days following its publication in a newspaper of general circulation.
Secretary of Trade and
Industry
Secretary of Finance
Undersecretary and Managing
Head
Commissioner
Board of
Investments
Bureau of Internal Revenue
Commissioner
Bureau of Customs
x x x
Annex A
Annex B
Annex C
______________________
Note: Signed by DTI SEcretary Cesar
Purisima; DOF Secretary Juanita Amatong; DTI/BOI Undersecretary Elmer Hernandez;
BIR Commissioner Guillermo Parayno and Customs Commissioner Antonio Bernardo on
May 6, 2004.
Published: May 19, 2004 - The
Manila Times.
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