BIR Ruling No. 010-62

January 10, 1962 BIR RULING NO. 010-62 Marsman & Co., Inc. P. O. Box 279 M a n i l a Gentlemen : Reference is made to your query regarding the actual market value of minerals sold abroad under the following conditions: cdi "When the mineral products are sold abroad, we received dollars from buyers thru bank drafts and/or letter advice. We in turn sell these dollars to the Central Bank, pursuant to its requirements, at the prevailing rate of exchange. As may be gleaned above, the premium over P2 to $1 arises out of the sale of dollars and not the sale of the mineral products. Moreover, in some instances, the mineral products are bartered for collateral goods without the benefit of back-to-back letters the credit. Evidently, the above mentioned ruling, the actual market value of the mineral products is the selling price of the collateral goods, because only when we sell the latter do we receive the peso value thereof. Yet in this case, the mineral products are sold first, and the collateral goods later." In reply, I have the honor to inform you that in the case of minerals sold abroad where the selling price is paid is in dollars thru bank drafts and/or letter advice, the actual market value therefore is the total amount received by the seller in pesos after the cost in dollars has been converted at the rate authorized by the Central Bank minus the cost of insurance and freight in case they are consigned under the C.I.F. terms. In the case of mineral products bartered for collateral goods, the market value of the mineral products for ad valorem tax purpose is the actual market value thereof for barter purposes less the cost of insurance and freight in case said expense incurred in transporting the minerals are borned by the shipper. Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue