BIR Ruling

November 24, 1976 Importations of Articles under R.A. No. 1916 are No Longer Exempt This refers to your letter dated September 2, 1976 requesting information as to what tax you are liable on the purchase of a Landrover, Station Wagon, Model 1971 with Motor No. 90100283 A which was brought into the Philippines tax-free under Republic Act No. 1916 and which will be sold to you by the Salvation Army for use in the missionary work in the Philippines. The documents presented show that the Overseas Missionary Fellowship, Inc. is the same China Inland Mission, Inc., incorporated and existing under the Act of Assembly of the Commonwealth of Pennsylvania, U.S.A., formed for the purpose of evangelization of the people of China, Japan, the Philippines, Indonesia, Malaya, Thailand and other countries by supporting Christian Missionaries in said countries. It is also represented that the Salvation Army and Overseas Missionary Fellowship are corporations of like manner, involved in religious work in the Philippines. 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, importations of articles under Republic Act No. 1916 are no longer exempt from the payment of compensating tax . Accordingly , abovementioned motor vehicle is subject to the payment of compensating tax. However, considering that the aforesaid motor vehicle which will be sold to you is five (5) years old, it is entitled to depreciation allowance of 70% 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 Book 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 . cdasia