Importation of a Motor Vessel Not Exempt from Value-Added Tax

January 18, 1999 BIR RULING NO. 006-99 109 (g)-000-00-006-99 Clean and Green Foundation FEBTC Intramuros Bldg. III Muralla Street, Intramuros Manila Attention: Ms . Doris Theresa Ho Director Gentlemen : This refers to your letter September 22, 1998, in effect, requesting for a ruling that your importation of a motor vessel is exempt from value-added tax. prcd It is represented that the said motor vessel named Grancevola 21 with a gross weight of 14.70 tons was imported by you from Ecolmare S.P.A., Italy for US$175,000.00 and that the purpose of your foundation in importing the said vessel is for cleaning the Pasig River. In reply, please be informed that Section 109(g) of the Tax Code of 1997, the importation of a vessel shall only be exempt from VAT if it is a passenger or cargo vessel of more than five thousand (5000) tonnage whether coastwise or ocean-going. Since the imported Grancevola 21 ship is intended to be used for cleaning the Pasig River, the same cannot be considered either as a passenger or cargo vessel. Accordingly, the said imported vessel shall be subject to 10% VAT imposed under Section 107 (A) of the Tax Code of 1997. It may be stated herein that the tax exemption privilege of a corporation under Section 30 of the Tax Code of 1997 covers only income tax in respect to income received by them as such. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue