BIR Ruling

May 21, 1973 Rural Bank of Mati, Inc. Mati, Davao Oriental Attention: Mr . Pacifico C . Dy Manager Gentlemen : This refers to your letter dated January 29, 1973 requesting information as to what tax you are liable on the sale of a Land Rover Motor vehicle imported tax free under Section 14 of Republic Act No. 720, as amended by Republic Act No. 5939, otherwise known as the Rural Bank Act considering that the same was totally wrecked and damaged in an accident sometime on July 29, 1972. acd It appears that said motor vehicle was imported into the Philippines tax free on February 7, 1964 for use as a service vehicle of the Rural Bank of Mati, Davao, Oriental. In reply, I have the honor to inform you that under the foregoing circumstances, and considering that the aforesaid motor vehicle is about nine years old; that under Department Order No. 13-62, dated April 18, 1962 which published the guidelines in determining the dutiable value of all makes of cars, regardless of country where manufactured, an old model motor vehicle of the description is entitled to 90% depreciation allowances of its Red or Blue Book value, it is the opinion of this Office that the transfer of the aforesaid vehicle by sale is a disposition of a fully depreciated asset. Such being the case, the same may disposed of without the payment of internal revenue tax due thereof. cdt Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue