BIR Ruling

January 24, 1969 Mr. Melvin C. Yabut 2100 Lumbang Street Dasmarias Village Makati, Rizal S i r : This refers to your letter dated January 21, 1969 stating that you would like to avail of the tax exempt sale of the car brought in tax-free by Mr. Gavino S. Leuterio, Protocal Officer of the Department of Foreign Affairs pursuant to the provisions of Republic Act No. 4112 which was the subject of our letter to him in July 18, 1968. However, before the sale would be consummated, you would like to be informed on the following: 1. Suppose you buy the car, will the exemption be good up to the lifetime of said car? 2. Suppose Mr. Leuterio buys a new car, will such purchase affect the exemption of the first car considering that he is only entitled to one personal car. 3. The guarantee, that you will not pay the taxes and duties due on said car if you buy the same. 4. Suppose Mr. Leuterio retires or terminated from his present position, will there be an effect on said car? In reply, I have the honor to inform you that the letter of this Office dated July 18, 1968 to Mr. Gavino S. Leuterio has already been superseded by the ruling of the Secretary of Finance dated October 23, 1968 holding that non-exempt purchasers of tax-free cars brought in by officials and employees of the Department of Foreign Affairs under the provisions of Republic Act No. 4112, are subject to the tax imposed in Section 183(b) or 190, as the case may be, in relation to Section 184(a) all of the Tax Code. Therefore, if you affect the purchase of the car of Mr. Leuterio, you are liable for the payment of the corresponding tax due thereon. With the foregoing information it is purposeless to answer one by one your first three (3) queries. However, with respect to the fourth and last inquiry, it is the opinion of this Office that the continued possession of Mr. Leuterio of the car in question for his personal use after his retirement or separation from the service will not render him liable for the payment of the compensating tax due thereon. casia Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue