BIR Ruling

March 19, 1976 A. I. C. Development Corporation 6th Floor Wellington Bldg. Binondo, Manila Attention: A . R . Capulong Gentlemen : This refers to your letter dated January 15, 1976 stating that your corporation is engaged in the buying of copra purposely for local sale and primarily for export, that your principal office is located in Manila; that in places where coconut plantations are located, you establish and maintain buying stations, purely to buy copra and never sell said purchased copra; and that the main office located in Manila is the only one authorized to sell copra, either, in isolated cases locally or, on the whole, for export. aisadc On the basis of the foregoing facts, you now pose the following queries: "1) Are the trading posts, located in different coconut regions, purposely to buy copra required to keep books of accounts apart and separate from those kept by the principal office which is located in Manila?; "2) Will these trading posts required to secure separate privilege tax receipts separate and distinct from each of the trading posts and distinct from the privilege tax receipts secured or to be secured by the principal office located in Manila?; "3) In whose BIR office jurisdiction shall have the power to examine the books of accounts of the said corporation; and "4) What are the internal revenue taxes that are to be paid by the said corporation principally engaged in the buying of copra principally for export and in some isolated instances, for local sale?" In reply, I have the honor to inform you as follows: 1. Your trading post located in the different coconut regions of the country whose primary purpose is to buy copra are not required to maintain books of accounts separate from those kept by the principal office in Manila. However, they should keep records of their transactions particularly their purchases which should be duly taken up in the books of the principal office. 2. The different trading posts which only buy copra from the local producers thereof but do not sell are not considered separate and distinct establishments within the purview of Section 178 of the Tax Code and therefore, they are not subject to the graduated fixed tax imposed in Section 182 (A)(2) of the Tax Code, as amended by Republic Act No. 6110. 3. It is the Regional Director of Revenue Region No. 4-A (Manila) who has the authority to conduct examination over the books of accounts of your corporation. 4. For buying and selling copra, you are subject to the graduated annual fixed tax prescribed in Section 182(A)(2) of the Tax Code based on your gross sale during the preceding year. Your gross sales consist of your domestic and export sales. Aside from said tax, you are subject to income tax. cdta Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-1182-568-4 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."