BIR Ruling

December 16, 1970 Atty. Amando K. Gaitos Del Mundo Building 2121 Taft Avenue, Manila S i r : This refers to your letter dated December 7, 1970 requesting information as to whether or not the sale of a six year old model motor vehicle, entered tax-free under the provisions of Republic Act No. 1916 is automatically exempt from the payment of compensating tax. In reply, I have the honor to inform you that the sale of a six year old model motor vehicle, entered tax-free under the provisions of Republic Act No. 1916 is not exempt from the payment of compensating tax. However, pursuant to Department Order No. 15-62 of the Department of Finance, dated April 18, 1962 which published the guideline in determining the dutiable value of cars, a six year old model of all makes of cars, regardless of country where manufactured is entitled to an 80% depreciation allowance of its Red or Blue Book value, and all old models to a 90% depreciation allowance. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue