BIR Ruling [DA-139-01]

August 28, 2001 BIR RULING [DA-139-01] Remar Pilipinas Rehabilitation Center of the Philippines, Inc. 14 Sandiko St., B.F. Homes, Quezon City Attention: Mr. Luis Martinez Vice-President Gentlemen : This refers to your letter dated April 27, 2001 requesting exemption from the payment of ad-valorem tax on the donation to you of a motor vehicle by Remar Spain. It appears that Remar Spain is the registered owner of Nissan Patrol SE-7221-CP, and with chassis number VSKAYG260U0594764; that Remar Pilipinas is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission under SEC Registration No. A199812059 dated November 4, 1998; and that in BIR Ruling No. 042-2001 dated March 22, 2001, Remar Pilipinas was granted exemption from the payment of donor's tax under Section 101(A)(3) of the Tax Code of 1997 on the aforesaid donation of Nissan Patrol by Remar Spain. In reply, please be informed that Section 2 of Revenue Regulation No. 14-97 as amended by Revenue Regulations No. 14-99 provides that: ". . . further, that notwithstanding any contrary rule, closed or covered four-wheel drive vehicles, primarily designed to carry passengers, regardless of the number of seats, shall be considered and taxed as an automobile for purposes of these regulations starting February 1, 2000." There is no question that the donated Nissan Patrol is a closed door four-wheel drive motor vehicle designed primarily to carry passengers. Such being the case, subject motor vehicle is subject to the ad-valorem tax imposed under Section 149 of the Tax Code of 1997 in addition to the 10% VAT under Section 107(A) of the same Code. We regret, therefore, to deny your request for lack of legal basis. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group