BIR Ruling

August 27, 1973 Central Bank of the Philippines Manila Attention: Foreign Exchange Dept . Gentlemen : This refers to the case of the Everett Travel Service (hereinafter referred to as Everett) which you referred to this Office for action. acd In this connection, I have the honor to inform you that, as with the case of the American Express Company, the tourists covered by packaged tours sponsored by Everett may be exempt from the taxes on their hotel room occupancy even if Everett pays the hotel concerned in pesos provided that the corresponding dollars that Everett will subsequently receive for its peso payment are duly accounted for by your Office as part of the foreign exchange reserve of the Philippines. Accordingly, if your office will confirm, as in the case of the American Express Company, that the corresponding dollar receipts of Everett from the hotel room occupancy of the tourists covered by package tours sponsored by it can be accounted of as part of the foreign exchange reserve of the Philippines, then, the receipts from the hotel room occupancy of said tourists shall be exempt from tax. In view thereof, we are requesting that Office to confirm or deny the claim that Everett is paid in dollars by tourist covered by its packaged tours and that said dollar receipts are duly accounted for as part of the foreign exchange reserve of this country. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5