Members of the Philippine Automotive Association Who Purchase Second Hand Automobiles

January 6, 1959 BIR RULING NO. 002-59 Messrs. Sycip, Gorres, Velayo & Co. 410 San Luis Street, Manila Attention : A . S . Monzon Tax Department Gentlemen : In reply to your letter dated September 4, 1958, I have the honor to inform you as follows: The members of the Philippine Automotive Association who purchase second hand automobiles which are fairly in running condition but who make some minor repairs thereon prior to their resale, such as changing minor spare parts with new ones, repairing minor damages to the body, such as scratches, general cleansing and polishing, which do not effect such changes in the vehicles as to practically remove all traces of their original appearance, are essentially dealers subject only to the graduated fixed annual tax. But if they are to completely overhaul the vehicles and effect so extensive changes thereon that they practically lose their original appearance, such as total repainting and putting in major parts, they will in effect become manufacturers, subject to the corresponding tax. No hard and fast rule can possibly be formulated as to when a repair may be considered extensive or superficial. Each case will have to be decide on its merits. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue