BIR Ruling

June 8, 1966 Atty. Anastacio S. Angeles R-204 Leyba Bldg. Dasmarias St., Manila S i r : This refers to your letter dated June 3, 1966 stating the following: "I have a client who intends to import trucks in knock-down condition and assemble the same locally. Afterwards, he will sell the same in the local market. I also have another client who intends to do the same, but this one will deal on air-conditioners (window type). cdti "This representation wishes to be fully informed of all the kind of taxes your Office is going to collect on these two kinds of business that my said clients are intending to operate." In reply, I have the honor to inform you that imported trucks in knock-down condition for assembly purposes are subject to the 7% advance sales tax, based on the total landed cost thereof, plus 25% mark-up pursuant to Section 183(b), in relation to Section 186, both the Tax Code. As assembler or manufacturer of trucks, your client is also subject to the fixed annual tax of P20.00 and to the sales tax of 7% prescribed by Section 182(A)(1) and 186 of the same Code. With regard to imported air-conditioners in knock-down condition for assembly purposes, the same are subject to 30% advance sales tax, based on the total landed cost thereof, plus 50% mark-up pursuant to Section 183(b), in relation to Section 185-A, both of the Tax Code. As manufacturer of air-conditioners, your other client is, likewise subject to the annual fixed tax of P20.00 and to the 30% sales tax prescribed by Sections 182(A)(1) and 185-A of the same Code. cdll Your clients are also subject to the income and additional residence taxes. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue