BIR Ruling

December 7, 1976 Mr. Wallace A. Mayo Pentecostal Church of God Servicemen's Center and Fellowship Home P. O. Box 396 Makati, Rizal S i r : This refers to your letters dated March 2 and March 3, 1976 requesting that a Rambler car, 4-door Model 1962 with Motor No. A-40629 and a Volkswagen car, 2-door sedan which were brought into the Philippines tax-free under Republic Act No. 1916 and which will be sold by the First Pentecostal Church of God of Philippines to any person wanting to buy be exempt from the payment of compensating tax. acd It is represented that the above-described motor vehicles were imported into the Philippines for religious use; and that they are no longer needed by your Mission because they are more than ten (10) years old. In reply, I have the honor to inform you that pursuant to the provision of Section 190 of the Tax Code, as amended by Presidential Decree No. 69 importation of articles under Republic Act No. 1916 are no longer exempt from the payment of compensating tax. Accordingly, abovementioned motor vehicles are subject to the payment of compensating tax. However, considering that the aforesaid motor vehicles which will be sold are more than ten (10) years old, they are entitled to depreciation allowance of 90% for purposes of the compensating tax, pursuant to Department Order No. 13-62 of the Department of Finance, dated April 18, 1962 which provides in part, as follows: "xxx xxx xxx "In ascertaining, estimating and determining the dutiable value of cars of US brands and manufacture, appraisers may take into account, but shall not be limited to, the retail factory price published in the Red or Blue Book. "2. The published retail factory price as published in the Red and Blue shall be entitled to depreciation allowance for the applicable model year of all makes of cars regardless of country where manufactured, in accordance with the following table: "Current Year Models 10% One Year Old Models 25% Two Year Old Models 40% Three Year Old Models 50% Four Year Old Models 60% Five Year Old Models 70% Six Year Old Models 80% All Old Models 90% "xxx xxx xxx It should be understood that pursuant to Section 190 of the Tax Code, as amended, the purchaser is considered the importer liable to the payment of the compensating tax due thereon. cdi Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."