BIR Ruling [DA-628-99]

November 9, 1999 BIR RULING [DA-628-99] Hon. Josefina M. Dela Cruz Provincial Governor Bulacan M a d a m : This refers to your letter dated October 12, 1999 requesting exemption from the payment of taxes and duties for the following items: cdll "A. 1x40 CTNR STC 182 pcs. Donated used Hospital Beds, Mattresses and Miscellaneous Supplies Under Bill of Lading No. DCL/MNL/06318 Under Vessel No. Pacific Discover V. 004 Date of Arrival: October 5, 1999 "B. 1x40 CTNR STC 135 pcs. Donation of used Medical Equipment and Supplies Under Bill of Lading No. DCL/MNL/06335 Under Vessel No. Pacific Discover V. 004 Date of Arrival: October 5, 1999" which have been donated by the various Bulakeo Associations abroad to the Provincial Government of Bulacan, which shall in turn be turned over to the Bulacan Provincial Hospital for its exclusive use. In reply thereto, please be informed that pursuant to Section 101 (B)(1) of the Tax Code of 1997 gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit or to any political subdivision of the said Government shall be exempt from donor's tax. Such being the case, and since the donee is the Provincial Government of Bulacan, the aforementioned foreign donations is exempt from the payment of the donor's tax pursuant to Section 101(B)(1) of the Tax Code of 1997. However, Section 109 of the Tax Code of 1997 which enumerates the transactions exempt from VAT does not include importations of articles/goods consigned to any political subdivisions of the Government. Accordingly, since the donated hospital beds, medical equipment and supplies will come from abroad, the importation thereof shall be subject to the 10% VAT based on the total value used by the Bureau of Customs in determining the tariff and customs duties, plus customs duties, excise taxes, if any, other charges, such tax to be paid by the importer prior to the release of such hospital beds, medical equipment and supplies from customs custody pursuant to Section 107(A) of the Tax Code of 1997 (BIR Ruling No. 248-92 dated September 8, 1992). cdll Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group