BIR Ruling

June 16, 1972 Hon. Tito M. Dupaya Chairman, Committee on Commerce & Industry House of Representatives Manila S i r : This refers to your letter dated June 14, 1972 requesting information as to whether or not subsidiaries of foreign firms are exempted from the payment of indent fees when they import any goods or products from their mother companies abroad. In reply, I have the honor to inform you that there is no such thing as indent fees under the Tax Code. However, it may be informed that imported goods or products intended for resale or are used as raw materials by the importer, thereof (whether subsidiaries of foreign firms or any importer) are subject to the advance sales tax of: 70% with a mark-up of 100% in the case of the articles enumerated under Section 184 of the Tax Code (except cars which are subject to the 100%, 125%, 150% and 200% advance sales tax depending on the landed cost thereof); 40% with a mark-up of 50% in the case of the articles enumerated in Sections 185, 185-A and 185-B of the Tax Code; and 7% with a mark-up of 25% in the case of articles falling under Section 186 of the Tax Code. It may also be informed that a person or firm who or which is engaged in the indent order business is considered a commercial broker within the purview of Section 194(t) of the Tax Code and, therefore, subject to the fixed and percentage taxes prescribed in Sections 182(A)(3)(bb) and 195, respectively, of the Tax Code, the percentage tax to be based on the gross compensation derived by him or it from his or its indent order business. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue