Are you a jewelry retailer or online seller?
If yes, here’s something you cannot ignore: jewelry is covered by a 20% excise tax. Even if you’re “just a reseller,” you can still be liable if your stock is untaxed.
This guide will walk you through what excise tax means for jewelry, who pays it, and how you as a retailer can protect your business from penalties.
What is Excise Tax on Jewelry?
Excise tax is a special tax on luxury or non-essential goods.
It’s different from income tax and VAT, and it must be paid before the item is released to the market.
For jewelry, this means BIR requires a cut before those rings, watches, or pearls reach buyers.
Why Does the Government Collect It?
The purpose of excise tax is simple:
- To generate revenue for government programs
- To regulate the sale of luxury items
- To make sure everyone pays the right tax
If you’re selling fine jewelry, this tax is part of the real cost of doing business.
Jewelry Covered by Excise Tax
BIR rules are broad — here’s what’s covered:
- Real or imitation jewelry
- Precious and semi-precious stones
- Pearls (real or imitation)
- Items made of gold, silver, or platinum
- Jewelry plated or alloyed with precious metals
Bottom line: if it sparkles and is valuable, it’s probably covered.
Jewelry Not Covered
Not everything is taxed. Excise does not apply to:
- Costume jewelry (plastic, wood, or glass beads)
- Stainless or brass accessories
- Silver-plated wares
- Eyeglass frames or mountings
- Dental gold or metals used for teeth
Only fine jewelry and precious stones fall under the 20% excise tax.
How Much Tax to Pay?
The rule is simple: 20% of the selling price.
- Gold ring = ₱100,000 → Tax = ₱20,000
- Bracelet = ₱200,000 → Tax = ₱40,000
Formula: Selling Price × 20%
Second-Hand & Auction Jewelry
- Local resale (second-hand) → excise already paid, no repeat tax.
- Auction/subasta imports → excise must be paid before release from Customs.
If excise wasn’t settled at import, even the new owner may be liable.
As a Retailer, Who Pays?
Normally, manufacturers and importers pay excise tax.
But here’s the catch:
- Retailers are safe only if their stock is excise-paid.
- If BIR finds untaxed jewelry in your shop, you can be charged.
Proof You Must Keep
Your best defense is documentation. Always keep:
- Supplier’s Official Receipt or Invoice
- ATRIG (Authority to Release Imported Goods) + proof of excise for imports
- Deed of Sale or old OR for second-hand pieces
If BIR audits you, these papers prove your stock is legal and tax-paid.
Common Retailer Mistakes
Many jewelry sellers still slip up. Watch out for these:
- Thinking: “Exempt ako kasi reseller lang.”
- Buying stock without checking proof of excise tax
- Declaring a price lower than the actual selling price
One wrong move can expose you to penalties.
What Happens If You’re Caught?
The penalties are heavy:
- 25% surcharge + interest for late filing
- 50% surcharge and possible case for fraudulent filing
- Extra excise + VAT for wrong declarations
- Untaxed stock = 10× the tax due or ₱100,000 minimum, plus seizure of goods
Quick Note for Manufacturers (FYI)
If one day you expand into jewelry production or importing:
- File BIR Form 2200-AN before release
- Submit Sworn Statements (June & Dec)
- Maintain Official Register Books (ORB)
For now, as a retailer, just make sure your suppliers are compliant.
Why Compliance Matters
When you stay compliant:
✅ No penalties or seizures
✅ Your jewelry shop stays legit
✅ Customers trust you more
✅ Less stress during BIR inspections
Protect Your Jewelry Business
Don’t risk losing your hard-earned inventory.
Download our Tax Savings Starter Guide — it’s free for professionals and small business owners.
Sources
- NIRC Sec. 150 – Excise tax on non-essential goods
- RMC 33-2004 – Jewelry sworn statements & incentives
- BIR Form 2200-AN (Jan 2018 ENCS) – Excise Tax Return
- RA 8502 (Jewelry Industry Development Act)
