BIR Ruling

March 6, 1974 Apex Exploration & Mining Co., Inc. 8th Floor, Ortigas Building Ortigas Avenue, Pasig Rizal Attention: Mr . Eugenio F . Fabic, Jr . Finance Assistant Gentlemen : In reply to the queries contained in your letter dated September 18, 1973, I have the honor to inform you as follows: 1. The ad valorem tax is payable upon removal of the copper from the locality where mined. Hence, that Company should pay its ad valorem tax in Davao where its mining operations is located. (Sec. 245, Tax Code) 2. If the ad valorem tax is already paid, that Company need not file a bond. 3. As to the depletion allowance granted mining companies, the pertinent portions of Section 30(g) of the Tax Code, as amended by Presidential Decree No. 69, are quoted as follows: "SEC. 30. Deductions from gross income . xxx xxx xxx "(g) Depletion of oil and gas wells and mines . "(1) In General . Based on the following percentages, there shall be a depletion allowance based on the gross income but in no case to exceed thirty-five per centum of the net income or of the net income, whichever is lower for the calendar year 1973 and fiscal year beginning July 1, 1973 and twenty-five per centum for the calendar year 1974 and fiscal year beginning July 1, 1974: Provided, however, That the percentage depletion allowance based on the gross income shall be the percentage of the gross income after an amount equal to any rents or royalties paid or incurred by the taxpayer is respect to the property has been deducted therefrom: xxx xxx xxx (B) Twenty-three per cent for mines of (1) Chromite, copper , gold, iron, manganese, mercury, nickel, and silver; and xxx xxx xxx (Emphasis supplied) 4. As to the questions on "what is the basis for the computation of the export tax for copper concentrate FOB or C & F", and, "what items are included in the computation of the FOB value of a shipment of copper concentrate," it is suggested that you refer them to the Bureau of Customs, which has jurisdiction on the matter. cdta Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR.