BIR Ruling

June 26, 1974 Messrs. Sycip, Salazar, Luna, Manalo & Feliciano 3rd Floor, Far East Building Buendia Ave., Makati, Rizal Attention: Mr . Virgelio T . Nibungco Gentlemen : This is in reply to your letter dated April 29, 1974 requesting the reconsideration of our ruling dated March 20, 1974 holding that the personal and household effects of your client, Mr. Anthony G. Lord, who is coming to the Philippines as representative of the Chase Manhattan Overseas Banking Corporation of New York, U. S. A., which holds an equity investment in a domestic corporation, are subject to the compensating tax prescribed in Section 190 of the Tax Code. casia In support of your request, you stated that your aforesaid client falls within the category of those exempted from the compensating tax under paragraph (f) of Section 190 of the Tax Code and not under paragraph (e) of said section as previously invoked in your letter dated January 11, 1974. Section 190(f) of the Tax Code provides as follows: "(f) Professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects belonging to persons coming to settle for the first time in the Philippines, for their own use and not for barter, sale or exchange, accompanying such persons, or arriving within ninety days before or after their arrival, upon production of evidence satisfactory to the Commissioner that such persons are actually coming to settle in the Philippines, that the articles were brought from their former place of abode, that change of residence is bona fide : Provided , That no vehicle, vessel, aircraft or merchandise of any kind, machinery of other articles for use in manufacture shall be classified under this subsection." Persons under this group or category may bring in tax free, and without limitation as to their value, the following: (a) Wearing apparel; (b) Personal and household effects; (c) Domestic animals; (d) Professional instruments and implements; and (e) Tools of trade, occupation or employment. However, vehicles, vessels, aircraft or merchandise of any kind, machinery, or other articles for use in manufacture are not included within the purview of the above-mentioned articles. It appearing that Mr. Anthony William G. Lord, his wife, Mrs. Victoria Jean Lord, and their minor children, Karen Victoria Lord and Scott Anthony Grattan Lord, all British, were granted Special non-immigrant status under Section 47(a) par. 2, of the Philippine Immigration Act of 1940, as amended by the Commission on Immigration and Deportation, they fall under the category of persons coming to settle in the Philippines for the first time. Such being the case, all their personal and household effects which they bring into the Philippines from Hongkong, their former place of abode, are exempt from the payment of the compensating tax pursuant to Section 190(f) of the Tax Code. This supersedes our letter to you dated March 20, 1974. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."