BIR Ruling

September 30, 1970 Liberty Aviation Corporation Manila International Airport Pasay City Attention: Mr . Ramon Herrera President Gentlemen : This refers to your letter dated July 9, 1970 requesting information as to whether the Beechcraft hereunder mentioned shall be exempt from tax, considering the following circumstances: 1) Beechcraft Model 23 Musketeer Serial M-430 arrived in the Philippines on the S. S. "Fernbay" on July 4, 1963; taxes and duties were paid; and was registered with the Philippines CAA and bore registration No. PI-0820. 2) The said aircraft was subsequently sold to the Hongkong Flying Club and was ferried by the said buyer from Manila to Hongkong in September, 1964; at that time it was de-registered from the CAA records. 3) The Hongkong flying Club will sell the same Beechcraft to a purchaser in the Philippines. In reply, I have the honor to inform you that notwithstanding the fact that corresponding taxes and duties were paid on the aircraft in question, the subsequent sale by the Hongkong Flying Club to a person other than the original purchaser will not exempt the said Beechcraft from the payment of the 7% compensating tax pursuant to Section 190 of the Tax Code, as amended, because as to him the sale is considered as an original importation. However, if the same aircraft was sold to the same vendee (original importer in 1963) and if as represented the corresponding taxes and duties were paid, then the subsequent sale will not subject the aircraft to tax, but the new attachments, spare parts and accessories that were placed with the aircraft will be subject to the 7% compensating tax imposed in Section 190 in relation to Section 186, both of the Tax Code, as amended by Republic Act No. 6110. cdti Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue