BIR Ruling

June 22, 1972 Lipave Management Corporation 5th Floor China Bank Building Paseo de Roxas, Makati, Rizal Attention: Mrs . Paz L . Aguilar Accountant Gentlemen : This refers to your letter dated May 23, 1972 requesting whether or not the Filipinas Synthetic Fiber Corporation, (hereinafter referred to as the corporation) an enterprise registered with the Board of Investment, is exempt from the payment of documentary and science stamps taxes under Section 8(a) of R. A. No. 5186, which for ready reference, is quoted hereunder as follows: "Sec. 8. Incentives to a Pioneer Enterprise . In addition to the incentives provided in the preceding section, pioneer enterprises shall be granted the following incentive benefits: "(a) Tax Exemptions . Exemption from all taxes under the National Revenue Code, except under the National Internal Revenue Code, except income tax, to the following extent: "(1) One hundred per cent up to December 31, 1972; xxx xxx xxx " It is represented that various properties of the corporation are presently insured with several domestic insurance companies through yourselves as general agents, and their insurance policies carry the corresponding amounts for documentary science stamp taxes chargeable to the corporation. In reply thereto, I have the honor to inform you that under the aforesaid R.A. No. 5186, the corporation is exempt from the payment of only those taxes for which it is directly liable. Since the documentary and science stamp taxes on the insurance policies and customs surety bonds are not the corporation's direct liability but merely shifted to it by the insurance companies which are the ones directly liable, it is not exempt from the payment of the said taxes. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue