BIR Ruling

March 22, 1976 Domingo, Villanueva & Tuy Attorneys-At-Law P. O. Box 451 CCPO Makati, Rizal Attention: Felicilito M . Domingo Gentlemen : This refers to your letter dated November 17, 1975 requesting our opinion as to whether your client-company will be exempt from the 7% sales tax. cdi It is represented that one of your client-companies intends to sell consumer products abroad through a local major trading firm whereby the latter will serve as the authorized exporter, their relationship shall be that of buyer and seller. In reply, please be informed that under Section 188(e) of the Tax Code, articles shipped or exported abroad by the manufacturer or producer, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the articles so exported, are exempt from the sales tax. In order to enjoy the exemption, the articles must be shipped or exported abroad by the manufacturer or producer himself. It appearing under the foregoing facts, that your client-company will not ship or export its consumer products directly but will instead sell them to a local major trading firm which will export them, the sales of your client-company is subject to the corresponding manufacturer's sales tax. cdta Very truly yours, CONRADO P. DIAZ Actg . Commissioner of Internal Revenue TAN-1182-568-4