BIR Ruling

January 13, 1972 Mr. Holman T. White Research and Development Center Surigao, Surigao del Norte S i r : This refers to your letter requesting information as to the taxes to which a Canadian firm will be liable for establishing a branch office in that province which will undertake the importation, assembly, and sale of Jamesbury Valves for industrial purposes. In reply, I have the honor to inform you that the branch office or assembly plant will be considered a manufacturer of valves. As such manufacturer it will be subject to the fixed annual tax of P50.00 imposed in Section 182(A)(1) of the Tax Code and the sale of the manufactured industrial valve shall be subject to the 7% sales tax imposed in Section 186 of the same Code. Importation of parts and accessories of the industrial valves shall be subject to the 7% advance sales tax based on the landed cost thereof plus 25% mark-up pursuant to Section 183(b) in relation to Section 186 both of the same Code. Moreover, the branch office will be subject to the corporate income and residence taxes. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue