BIR Ruling

November 5, 1974 Department of Public Works Transportation & Communications Bureau of Public Highways Manila Attention: Mr . Baltazar Aquino Commissioner Gentlemen : This refers to your letter dated October 12, 1973 requesting information in connection with the claim of William Lines, Inc., Manila, that the issuance of a Tax Clearance Certificate No. 44-73 dated January 29, 1973, by the Assistant Regional Director of Revenue Region No. 13, Central Visayas, Cebu City operates to exempt said corporation from the withholding tax provisions of Revenue Regulations No. V-40 on your shipment through their carriers on the following dates: aisa dc a. March 18, 1969 b. September 6, 1968 c. January 14, 1971 d. July 10, 1968 In reply thereto, I have the honor to inform you as follows: A tax clearance certificate merely means that the taxpayer to whom it is issued has no outstanding tax liability as of the date of issuance thereof. The tax clearance issued to William Lines, Inc. does not mean that the taxpayer had paid the 2% transportation tax on the receipts they will derive from your payment of the corresponding charges on the abovementioned shipments which, we understand you, are making payment only now. In fact, we may assume that the taxpayer could not have declared for taxation the transportation charges which you are paying only now since the tax normally accrues and become payable when such charges are received by the taxpayer, unless the taxpayer is reporting its gross receipts on the accrual basis. Unless the taxpayer can show direct evidence of payment of the tax on its claim, the 2% tax should be withheld therefrom in accordance with Republic Act No. 1051, as amplified by Revenue Regulations No. V-40. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5