BIR Ruling

September 7, 1971 Mr. Oscar G. Tuason 330 G. Villanueva Street Pasay City S i r : This refers to your letter dated August 20, 1971 requesting information as to what internal revenue taxes you would be liable to for engaging in a re-refining business wherein used oil is purified in the following manner. cdta 1. Water contamination is first removed from the used oil by boiling; 2. Then acid is added to remove detergents; 3. Then the large particles of dirt are allowed to settle at the bottom of the tank; 4. The smaller particles are then filtered out. To hasten filtering, clays are added and the entire mixture is heated; 5. Finally, the filtered oil is blended with oil purchased from Esso, Mobil, or Shell. It is stated in your letter that although there is a physical change, no chemical changes is made on the used oil from the foregoing process. In reply, I have the honor to inform you that for engaging in the aforecited business activity, you are a manufacturer of lubricating oil. As such manufacturer of lubricating oil, you are subject to the annual fixed tax of P2,000.00 prescribed in Section 182(A)(3)(v) of the Tax Code, and our reclaimed oil product is subject to the specific tax imposed in Section 142(b) of the Tax Code, (BIR Ruling No. 65-120, dated October 25, 1965). cdi Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue