BIR Ruling

November 5, 1976 Sabena Enterprises 11-C Cardis Street Quezon City Attention: Mr . Antonio O . Samson Gentlemen : This refers to your letter dated September 13, 1976 requesting information as to what fixed and percentage taxes are due from your business transactions, viz: aisa dc "1. I am an importer of truck parts and subsequently resell them 'as is' to my customers. "2. I also buy and sell locally manufactured truck parts. "3. In computing my fixed tax liability, will the gross sales be based on total of import and local sales?" In reply, I have the honor to inform you as follows: As an importer of truck spare parts for resale, you are subject to the P50.00 annual fixed tax prescribed in Section 182(A)(1) of the Tax Code and to the 7% advance sales tax on your importation of truck spare parts said tax to be based on the landed cost thereof plus 25% mark-up pursuant to Section 183(b) in relation to Section 186, both of the Tax Code. If you buy locally manufactured truck parts and sell them to customers, you are a dealer, subject to the graduated annual fixed tax prescribed in Section 182(A)(2) of the Tax Code, the amount of tax to be determined on the basis of your gross receipts during the preceding year. However, if you have just started your business as a dealer and therefore had no gross receipts during the preceding year (1975), you are subject to a fixed tax of P10.00. Thereafter, your annual fixed tax as a dealer shall depend on your gross sales during the preceding year. Your sales of imported spare parts, which are subject to the advance sales tax and which tax is payable prior to the release thereof from customs custody, do not form part of your gross sales for the purpose of computing the graduated annual fixed tax due from you as a dealer. cdta Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."