Republic of the Philippines

DEPARTMENT OF FINANCE Roxas Boulevard Corner Pablo Ocampo, Sr. Street Manila 1004

DEPARTMENT ORDER NO. 32 _ ns 21 December 2005 In line with the continuing program of the government to improve the delivery of public service and with the Department's continuing efforts to safeguard the integrity of the Tax Credit System being administered by the One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (OSS Center), the following directives are hereby ordered: 1. USE OF THE NEW FORM OF TAX CREDIT CERTIFICATES. Effective December 1, 2005, upon the recommendation of the Board of Investments and in conformity with the Department's policy, the OSS Center is now using the new form of Tax Credit Certificates (OSS-Center Form No. 0301 Series of 2005) for all tax credits to be granted under the following laws: a. Executive Order No. 226, the Omnibus Investments Code of 1987 b. Executive Order No. 209, to implement Section 35 of RA 8550, the Philippine Fisheries Code c. Section 106 of the Tariff and Customs Code of the Philippines d. National Internal Revenue Code of the Philippines e. Republic Act 7844 or the Export Development Act of 1994 f.

Executive Order No. 765 granting exemption to suppliers of foreign-funded government projects

g. Letter of Instruction 1355 or the Order Regalo Program h.

Such other incentive laws as may be covered by other Office Orders

2. PREVIOUSLY ISSUED TAX CREDIT CERTIFICATES Notwithstanding the issuance of the new form of Tax Credit Certificates, tax credit certificates issued by the Center using the previous form from January 5, 2000 onwards under the laws enumerated in Section 1 hereof shall remain valid and should continue to be honored by BIR and BOC subject to guidelines provided in Section 4 hereof, and until the validity of these TCCs are otherwise revoked and/or repealed. 3. FEATURES OF THE NEW TCC FORM. a. In order to facilitate the use of the TCC at either the Bureau of Internal Revenue (BIR) or at the Bureau of Customs (BOC), the new TCC form is now split into twin but separate and distinct certificates which will both be issued to one claimant at the same time- the first representing the CUSTOM DUTY PORTION with a numeric serial number followed by a letter D, the other representing the INTERNAL REVENUE TAX PORTION with the same numeric serial number as the DUTY PORTION but followed with a letter T. b. The new form contains modified and enhanced security features to be separately disclosed by OSS-Center only to responsible levels of authority at both the OSS-Center and at the BIR and BOC. The concerned staffs at these offices are expected to secure the confidentiality of the security features made known to them, and shall be held responsible for unauthorized disclosures of the same. 4. USAGE OF TCCs. The following shall be observed in the use of the tax credit certificates issued by the OSS-Center: 4.1 NEW FORM OF TCC: a. The duty portion TCC may only be used at the Bureau of Customs for payment of import duty and/or import VAT/other taxes; b. The internal revenue tax portion TCC can be applied and/or used at both the BIR, for payment of the holder's national internal revenue taxes, except withholding taxes, and the Bureau of Customs, for payment of either customs duties and import VAT and taxes;

c. The application to use the TCC shall be covered by the requisite Tax Debit Memo issued by the OSS Center and in conformity with Department Order No. 20-03. 4.2 TCCs ISSUED USING THE PREVIOUS FORM (from January 5, 2000): a. The OSS-Center shall only authorize the use of this TCC at the BIR if the tax credit granted is based on national internal revenue taxes, and the use at the BOC if the tax credit granted is based on customs duties and import vat and taxes. In case the tax credit granted is not based on taxes and duties, like NVE and NLC provided for by PD 1789 as amended by BP 391, the TCC shall be authorized for use at either BIR and BOC for payment of national taxes and duties, except withholding taxes, as provided for under the same incentive law. b. For this purpose, the OSS-Center shall issue a certification attached to the TDM on the basis of the TCC amount being authorized for use at either BIR or BOC. 5. ACCEPTABILITY OF TCCs FOR PAYMENT AT BIR AND/OR BOC. Cognizant of the guidelines governing the use of the TCCs, BIR and BOC shall accept TCCs issued by the OSS-Center for payment of national taxes and duties, except withholding taxes, considering that this is provided for under the enabling laws, subject to the guidelines stated herein. All orders, rules, regulations and other issuances, which are inconsistent with this Order, are hereby repealed or modified accordingly.

This Order shall take effect immediately and all concerned shall be guided accordingly.

MARGARITO

A. TEVES

Secretary -.:

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