BIR Ruling

January 10, 1967 F. M. Apolinario & Co., Inc. Magsaysay Building T. M. Kalaw, Ermita Manila Gentlemen : This refers to your letter dated August 22, 1966 requesting information as to what internal revenue taxes your company shall be liable to, if it commences business in accordance with the following purposes: Primary Purpose : To purchase, charter, own, hire, build, or otherwise acquire power vessels, non-propelled vessels, ships or other floating equipment in the transportation and carriage of passengers, freights, goods, merchandise of every kind, class and description in or outside Philippine waters. Incidental Purposes : (1) To act as financial, commercial, general and shipping agent and/or managers for other persons, corporations or entities engaged in the shipping business or in the marine equipment and supplies business, or in any business related to the management and operation of ships and marine vessels of any kind. (2) To build, buy, sell, manage, repair or deal in ships, boats, lighters, launches and vessels of all kinds and their equipment, furnishings and appurtenances, boilers, engines, tackle and apparel, together with all materials, articles, tools, machinery and appliances entering into or suitable and convenient for the construction, equipment, maintenance and operation thereof, incident to the primary purpose indicated herein above. cdpr (3) As may be necessary to accomplish the primary purpose, to employ the services of qualified ship and cargo surveyors with particular reference to ocean and interisland shipping. (4) To purchase, hold, convey, sell, lease, rent, mortgage, encumber, and otherwise deal with real property, improved or unimproved, as far as the purposes for which the corporation is formed may permit, and to erect, construct, and alter, manage, operate and lease, in whole or in part, warehouses and building thereon. (5) To carry on and engage in the buying and selling and/or husbanding, supplying of vessels, boats and other floating equipment and/or otherwise engage in ship chandler business. (6) To acquire, hold sell, exchange, deal and invest in stocks, bonds, or securities of the Government, or any subdivision thereof, or any public or private corporation, person, firm, partnership, association or other organizations, and in real and personal property of all kinds to the same extent as a juridical person might, could or would do; and while the owner of such stocks or interest therein, or other obligations or evidences of indebtedness, to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon, or consent in respect thereof, for any and all purposes. In reply thereto, I have the honor to inform you that if your company pursues the business described under "Primary Purpose," it is a common carrier, subject to the fixed annual tax of P20.00 and to the 2% tax on your gross monthly receipts, pursuant to Sections 182(A)(1) and 192 of the Tax Code. prcd If it pursues the activity described in the first paragraph of your corporation's incidental purposes, it is a commercial broker, subject to the annual fixed tax of P150.00 pursuant to Section 182(A)(3)(s) and to the 6% tax prescribed in Section 195, both of the Tax Code. If it engages in the repair of ships, boats, lighters, launches and vessels of all kinds under the second paragraph of your corporation's incidental purposes, it is an operator of dockyard subject to the annual fixed tax of P20.00, pursuant to Section 182(A)(1) and to the 3% tax prescribed in Section 191, both of the Tax Code. If it engages in buying and selling and/or husbanding, supplying of vessels, boats and other floating equipment and/or otherwise engage in ship chandler business under the fifth paragraph referring to incidental purposes of your corporation, it is a commercial broker, subject to the graduated annual fixed tax prescribed in Section 182(A)(3)(s) and to the 6% tax prescribed in Section 195, both of the Tax Code. If it engages in the business activities described in the fourth paragraph of the incidental purposes of your corporation it is a real estate dealer, subject to the graduated real estate dealers tax prescribed in Section 182(A)(3)(s) of the Tax Code. LLpr Your corporation is likewise subject to the income and additional residence taxes. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue