BIR Ruling

May 5, 1967 Mr. Isidro Evangelista Tax Consultant 401-406 Samanillo Bldg. Escolta, Manila S i r : This refers to your letter dated May 3, 1967 stating that a car was imported into the Philippines by the Society of Jesus tax free under Republic Act No. 1916; that the car was insured and upon meeting an accident it was smashed and damaged to the extent of P6,500.00; that the insurance company agreed to indemnify the Society of Jesus with the sum of P6,500.00 on condition that said society will assign the damaged vehicle to the same insurance company which is not for the purpose of registering it but solely for the purpose of recovering any salvage value thereof. You now request information whether or not the assignment of the Society of Jesus of the aforesaid dilapidated motor vehicle to the insurance company is the taxable conveyance or transfer referred to in the proviso of Republic Act No. 1916. In reply, I have the honor to inform you that the assignment by the Society of Jesus of the damaged vehicle to the insurance company for the purpose of recovering any salvage value is not the taxable conveyance or transfer contemplated under Republic Act No. 1916. The conveyance or transfer referred to under said law, refers to a case where the exempt importer of the imported tax free articles subsequently conveyed or transferred the same to other parties for valuable consideration. llcd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue