Implementing Section 295(F), in relation to Section 2994, both of the National Internal Revenue Code of 1997, as Amended by Republic Act (RA) No. 11534. Otherwise known as the “Corporate Recovery and Tax Incentives for Enterprise Act” (CREATE Act), on the Tax Treatment of the Importation of Petroleum Products into, and Subsequent Transfer, Transport and/or Withdrawal through and from Freeport Zones and Economic Zones.

Section 1– Scope

Upon the effectivity of the CREATE Act, the importation of petroleum and petroleum products into the Freeport Zones and Economic Zones is already subject to applicable taxes. These Regulations are hereby issued in order to ensure the collection of the proper duties and taxes on petroleum products and to institute strict measures to control and monitor the movement and storage thereof which are entered and imported into Freeport Zones and Economic Zones and its subsequent transfer, transport, and/or withdrawal therefrom.

Section 2

Pursuant to Section 244, in relation to Section 245, of the Tax Code, these Regulations are hereby promulgated in order to prescribe the following:

(i) the tax administration treatment of all petroleum and petroleum products entered and/or imported into Philippine Freeport Zones or Economic Zones;

(ii) the strict monitoring of the movement of all petroleum and petroleum products within the aforementioned Zones and the subsequent transfer, transport, and/or withdrawal of the same therefrom; and

(iii) the refund of Value-Added-Tax (VAT) and Excise Taxes paid for transactions statutorily zero-rated or exempt therefrom.

Moreover, these Regulations will provide administrative guidelines on the operations and maintenance of storage tanks, facilities, depots, or terminals where commodities for commercial use can be stored.

Section 3– Tax Treatment of all petroleum and petroleum products entered and imported into freeport zones and economic zones, or locators or other persons/entities; refund of taxes paid; authority to release imported goods(ATRIG) and other administrative requirements.

The excise tax or VAT is paid, as the case maybe, for petroleum and petroleum products that are exported outside the Philippines or transferred, delivered, and sold to the following:

For VAT: (1) to a registered export enterprise and have been directed exclusively used in its registered export project/activity; or (2) to entities engaged in international shipping or air transport operations and have been actually used therefore; or (3) to entities that are statutorily zero-rated for VAT under special laws or international agreements to which the Philippines is a signatory;

For Excise Tax: (1) international carriers of Philippine or foreign registry on their use of consumption outside the Philippines; or (2) exempt entities or agencies covered by tax treaties, conventions, and other international agreements for their use of consumption; or (3) entities which are by law exempt from direct and indirect taxes.

May be refunded by filing a claim for credit or refund with the BIR for verification and evaluation. Once approved, the claim shall be forwarded to the BOC for cash payment or issuance of a tax credit certificate, as applicable. No claim for refund shall be granted unless it is properly shown to the satisfaction of the BIR that said petroleum or petroleum products have actually been transferred, delivered, sold, and used by, the foregoing entities for the above-stated purposes. 

The importation, however, of petroleum products by a Philippine refinery enjoying fiscal incentives with an Investment Promotion Agency (IPA) of crude petroleum to be refined at its refinery inside the Zone, shall be exempt from payment of applicable duties and taxes under Section 295(G) of Tax Code.

Upon lifting of the petroleum products produced from the imported crude oil, the applicable duties and taxes shall be paid thereon, thus:

  1. During Income Tax Holiday (ITH) the excise tax or VAT paid, as the case may be on petroleum products sold to entities entitled to 0% VAT or excise tax exemption may be claimed for refund under these rules and;
  2. During 5% SCIT/GIE, the export sales and sales inside the Zones shall be exempt from VAT and excise taxes.

The introduction into the territory and petroleum products produced from the imported crude oil by the said refinery to the extent of its local sales allowance shall be subject to applicable duties and taxes payable by the importer thereof; Provided that the excise tax or VAT paid, as the case may be, paid on sale to entities entitled to 0% VAT or excise tax exemption may be claimed for refund under this rules: Provided finally, that importations of petroleum products produced from imported crude oil by registered export enterprises located outside the Zones and used directly and exclusively in their registered project or activity shall be exempt from VAT but subject to excise taxes.

For excise tax purposes, all importers of petroleum and petroleum products shall secure a Permit to Operate with the BIR’s ETRD. Such permit shall prescribe the appropriate terms and conditions which shall include, among others, the issuance of a Withdrawal Certificate and the submission of liquidation reports, for the Permittee’s strict compliance 

Section 4 – Registration of all storage facilities

All tank facilities, depots, or terminals throughout the Philippines, including those located within the Freeport Zones as well as within the Economic Zones shall be registered by the owners, lessors or operators thereof with the appropriate BIR Office having jurisdiction over the said facilities as follows:

Revenue Regions Where the Storage Facilities are Located Appropriate BIR Office Where to Register
Revenue Region Nos. 4, 5, 6, 7, 8, 9 and 10 Excise Tax Regulatory Division, National Office
Revenue Regions 1, 2 and 3 Excise Tax Area I – Baguio City
Revenue Region Nos.11 and 12 Excise Tax Area III – Bacolod
Rvenue Region Nos. 13 and 14 Excise Tax Area IV – Cebu
Revenue Region Nos. 15 and 19 Excise Tax Area V – Davao
Revenu Region Nos. 16, 17 and 18 Excise Tax Area VI – Cagayan de Oro


In cases where said facilities will be used for the storage of petroleum or petroleum products or other goods subject to Excise Taxes, a Permit to Operate from the BIR shall be issued. Said permit shall prescribe the appropriate terms and conditions which shall include, among others, the maintenance of Official Register Books or their equivalent, issuance of Withdrawal Certificate for every removal from the refinery or customs custody to the point of destination and succeeding transfer of petroleum products, joint supervision over the facilities with the BIR, through the assignment of Revenue Officers, and stocktaking/physical inventory taking of petroleum and petroleum products stored therein. The monitoring requirements prescribed in this Section and in the permit granted shall likewise be strictly observed.

 A facility that will not be used for storage of petroleum or petroleum products or other articles subject to Excise Taxes, if satisfactorily established to the BIR, will be issued a Permit to Operate Exempt Facility. This notwithstanding, both Permit to Operate and Permit to Operate Exempt Facility should categorically state the goods stored therein, and should any changes be planned, an application for a new permit should be made. 

All owners, lessors, or operators of tank facilities, depots or terminals shall submit the following copies of documents to the appropriate BIR Offices according to Section 4 of these Regulations within fifteen (15) days from the date of effectivity of these Regulations:

  1. BIR Certificate of Registration; 
  2. Latest Blueprint of the Perspective Design of the whole storage facility, depot or terminal specifically containing, among others, the tanks located therein, duly approved by a licensed professional authorized by law to issue such document; 
  3. Lease or Operating Agreement, in case the whole facility, depot, or terminal is actually being leased or operated by another person or entity other than the owner thereof; 
  4. Terminalling, Lease, or Storage Agreement(s) with the lessee-owner(s) of the content(s) of the respective tank(s); and 
  5. Notarized undertaking(s) executed jointly with the respective lessee owner(s) of the content(s) of the storage tank(s) within the facility, depot or terminal containing the tank number, description of the product, and the volume of inventory thereof as of the date of effectivity of these Regulations. 

The concerned BIR Offices shall issue the duly approved Permits to Operate, after evaluation/validation of the foregoing documents and the conduct of verification and ocular inspection of the facilities, depots, and terminals, within thirty (30) days from receipt of such documents.