BIR Ruling

February 5, 1997 Meer, Meer & Meer 9th Floor, PLDT Building, Legaspi Street Makati City Attention: Atty . Lamberto Meer Gentlemen : This refers to your letter dated August 13, 1996 requesting for reconsideration of the revocation of BIR Ruling No. UN-303-94 issued on November 4, 1994. cdpr The request is anchored on the contention that the Economic Intelligence and Investigation Bureau (EIIB) erred in finding that the actual business operations of Global Reefers Carriers, Ltd. (GRC) and Del Monte Fresh Produce International Inc. (DMFPI) are not as what were represented by you, which finding was the basis for the revocation of the ruling. In reply, please be informed that facts gathered by agents of the EIIB point to the following: 1. that in 1994, with 26 refrigerated vessels, GRC was able to transport 446,265,585 kilos of fresh fruits from the cities of Davao and Cagayan de Oro to a number of Far East ports covering 370 voyages; 2. that in 1995, with 38 owned or chartered ships, GRC transported 522,543,865.21 kilos of fruits from the same places to the Far East, all for the account of DMFPI under an Affreightment Contract executed between the said parties. This is translated to a staggering income of P1,403,122,245.24. Not a single centavo was paid as tax to the national government; 3. that GRC's husbanding agent in Davao is DMMMC while its shipping agent in Cagayan de Oro is DMPI (Del Monte Philippines, Inc.); 4. that GRC has established its business office at J.P. Laurel Avenue, Km. 9, Bo. Pampanga, Davao City, with Atty. Herminigildo T. Cabreros as its resident agent; and 5. that copies of documents dated January 23, 1996 furnished the EIIB agents by an official of GRC confirm the shipping operations and problems of GRC such as handling of fruits for export, capability of its Far East Fleet, raising charter market, number of years in operation, etc. prcd Based on the foregoing facts, GRC and DMFPI are resident foreign corporations doing business here in the Philippines. Such being the case, they should be held liable to the appropriate taxes on income derived from all sources within the Philippines. We, therefore, find no reason why we should reconsider the revocation of BIR Ruling No. UN-303-94 issued on November 4, 1994. In view thereof, your request for reconsideration has to be as it hereby DENIED. This constitutes the final decision of this Office on the matter. cdt Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue