BIR Ruling

November 4, 1971 Mr. Fernando A. Gaite 1515 San Gregorio St. Paco, Manila S i r : This refers to your letter dated July 22, 1971, requesting information as to whether or not, as representative of a foreign leasing firm importing machineries, equipment and parts for industrial and agricultural purposes, you are subject to import taxes. cdta In reply, I have the honor to inform you that imported agricultural and industrial machineries, equipment and parts for lease are subject to the compensating tax imposed in Section 190 of the Tax Code in relation to Sections 184, 185 and 186 of the same Code depending upon the kind of the machineries, equipment and parts imported. Moreover, if the importer leases said machineries and provides fuel and operators therefor, the importer falls under the purview of an independent contractor subject to the annual fixed tax of P50.00 imposed in Section 182(A)(1) of the Tax Code and to contractor's tax of 3% on his gross receipt pursuant to Section 191(18) of the same Code, as amended, (BIR Rulings Nos. 67-007, and 68-016). However, if the said importer leases those machineries without providing fuel and operator, then he is not subject to the contractor's fixed and percentage taxes. cdta Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue