BIR Ruling

February 12, 1969 Philippine Air Lines, Inc. P.O. Box 954 Manila Attention: Mr . Buenaventura M . Veloso Senior Vice-President Gentlemen : This refers to your letter dated January 23, 1969 requesting exemption from the payment of the regular documentary and science stamp taxes on tax clearance certificates issued to PAL personnel travelling abroad on company business and on all documents or transactions of PAL under Section 13 of its franchise, Act No. 4271, as amended, which is quoted hereunder as follows: "Sec. 13. In consideration of the franchise and rights hereby granted, the grantee shall pay the National Government during the life of this franchise a tax of two per cent of the gross revenue or gross earning derived by the grantee from its operations under this franchise. Such tax shall be due and payable quarterly and shall be in lieu of all taxes of any kind, nature or description, levied, established or collected by any municipal, provincial or national authority; Provide, That if, after the audit of the accounts of the grantee by the Commissioner of Internal Revenue, a deficiency tax is shown to be due, the deficiency tax shall be payable within ten days from the receipt of the assessment. The grantee shall pay the tax on its real property in conformity with existing law." In reply, I have the honor to inform you that under the foregoing provision, the exemption contemplated refers to taxes for which PAL is directly liable. As the tax clearance certificates are for the use of PAL personnel, the regular documentary and science stamp taxes due thereon are the personal tax liabilities of said personnel. PAL, not being directly liable to the aforesaid taxes, is, therefore not covered by the exemption. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue