BIR Ruling

May 18, 1970 Mr. Samuel B. Demonteverde General Secretary Young Men's Christian Association of the Philippines P.O. Box 1992, Manila S i r : This refers to your letters dated March 18 and May 14, 1970 stating, among, others, that the YMCA of the Philippines owns a Chevrolet Station Wagon, Model 1962, entered tax-free under the provision of Republic Act No. 1916; and that since said car no longer meets the needs of the Association as it is already fully depreciated, you have decided to sell the car at an amount to cover this year's maintenance and repair cost. You now request that the interested party or buyer be exempted from the payment of the corresponding internal revenue tax due on said car. In reply, I have the honor to inform you that considering that the aforesaid motor vehicle is an eight year old model; and considering that under Department Order No. 13-62, dated April 18, 1962 which published the guideline in determining the dutiable value of cars of U.S. brands and manufacture, a six year old model is entitled to an 80% depreciation allowance of its Red or Blue Book value, it is the opinion of this Office that the sale of the aforecited motor vehicle is a disposition of a fully depreciated asset. Such being the case, the same may be sold without the payment of internal revenue tax due thereon. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue