BIR Ruling

June 23, 1969 MEMORANDUM FOR: The Chief Business Tax Division Thru the Revenue Operations Head (Assessment) This refers to the request of Mr. R. I. Harrison, a British subject (who is in the Philippines as a pre-arranged employee of the Philippine Refining Co.) for exemption from the payment of compensating tax due on personal and household effects. The request for exemption is premised on the representation that Mr. Harrison is coming to settle for the first time in the Philippines, thus exempt from tax under Section 190(f) of the Tax Code. cdi Section 190(f) of the Tax Code, as amended by Republic Act No. 4103 provides as follows: "SEC. 190(f) Professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects belonging to persons coming to settle for the first time in the Philippines, including citizens of the Philippines who have resided abroad for not less than ten years, for their own use and not for barter, sale or exchange, accompanying such persons, or arriving within ninety days before or after the arrival of their owners, upon the production of evidence satisfactory to the Commissioner of Internal Revenue that such persons are actually coming to settle in the Philippines, that the articles were brought from their former place of abode, that change of residence is bona fide : Provided, That no merchandise of any kind, machinery or other articles for use in manufacture, shall be classified under this subsection." Obviously, Mr. Harrison cannot claim exemption from the payment of compensating tax under the aforequoted law. He came to the Philippines as a prearranged employee of the Philippine Refining Co., he has not submitted any evidence satisfactory that he is actually coming to settle in the Philippines; and that there is no bona fide showing that he is changing his residence from Great Britain to the Philippines. In view of the foregoing, it is believed that there is no legal basis to grant Mr. Harrison's request. However, his personal effects, like his clothing, shoes, and other articles ordinarily worn by him may be exempted from the compensating tax. (SGD.) PRISCILLA R. GONZALES Acting Revenue Operations Head (Legal)