BIR Ruling

July 20, 1976 Bank of America P.O. Box 571 Commercial Center Makati, Rizal Attention: Mr . Riodino M . Crescini BankAmericard Sales Manager Gentlemen : This refers to your letter dated April 26, 1976 requesting exemption in behalf of your cardholders from the tax on hotel room occupancy. aisa dc It is represented that while hotels honoring BankAmericard get reimbursed in Philippine pesos, your operations are such that there is a constructive inflow of foreign currency coming into this country. To explain this point, you stated that: "1. BankAmericard Center in San Francisco reimburses our peso payments to hotels in dollars. This reimbursement is made to our Manila foreign exchange account and at the time of reimbursement, the dollars are already in the exchange reserve of the Philippines. "2. Our Manila account is a part of the foreign exchange reserve of the Philippines. "3. Operating as a department of Bank of America NT & SA, Manila Branch, we are therefore provided with a foreign exchange license and follow Central Bank regulations acquiring and disbursing dollars from our Manila foreign exchange account." In reply, I have the honor to inform you that it appearing as confirmed by the Central Bank in its letter to you dated July 14, 1976 that the dollar equivalent of your peso payments are actually and duly accounted for as part of the foreign exchange reserve of the Philippines, the charges for hotel room occupancy of foreign tourists and travellers who are holders of BankAmericard are exempt from the 3% tax and documentary stamp tax. However, for purposes of record, and in order that hotels concerned can comply with the requirements of Revenue Regulations No. 10-72, you should furnish them information as to the amount of foreign currency credited to your account by BankAmericard Center in San Francisco, the corresponding foreign tourist or traveller covered by the account and evidence showing such account. cdt 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."