BIR Ruling

May 14, 1970 Atlantic Gulf & Pacific Co. of Manila, Inc. P.O. Box 626, Manila 12104 Attention: Mr . R . B . Putong Office Attorney Gentlemen : This refers to your letter dated May 12, 1970, stating the following: "We would appreciate your opinion on what particular Percentage Tax our Company would be liable based on the following facts: "1. We have at present several lighters and tugboats which are used principally to transport export and import bulk liquid cargoes such as, coconut oil, glycerine, alkane, tallow, palm oil, etc. from the shore tank to the vessel in the Bay or vice versa for Philippine Refining Company, Inc., Procter & Gamble Philippine Manufacturing Corporation, Colgate-Palmolive Philippines, Inc., etc. "2. In addition to the above principal use of our lighters and tugboats, we utilize same to transport materials and equipment in connection with our construction jobs. "3. In the past and up to the present, we are paying the 3% Contractor's tax under Section 191 of the Revised National Internal Revenue Code of the Philippines (R.A. 6110). "4. Recently, we are being required by the Philippine Coast Guard to present the 2% Carrier's Tax Receipt (under Section 192) or a certificate of exemption thereof before they would release the licenses of our tugboats and lighters. "Since our annual licenses have expired or are expiring very soon, we are wondering how we could obtain our licenses from the Philippine Coast Guard under the above facts. In reply, I have the honor to inform you that for engaging in lighterage and towing service you are considered a contractor subject to the annual fixed tax of P50.00 and to 3% tax on your gross receipts, prescribed by Sections 182(A)(1) and 191 both of the Tax Code, as amended by Republic Act No. 6110. Such as being the case, you are not subject to the 2% common carrier's tax imposed by section 192 of the Tax Code on the receipts derived for such services. acd Very truly yours, MISAEL P . VERA Commissioner of Internal Revenue