BIR Ruling No. 022-65

April 19, 1965 BIR RULING NO. 022-65 Mr. Severino C. Karganilla 669 Sales Street, Sta. Cruz M a n i l a S i r : Reference is made to your letter dated January 8, 1965 stating as follows: cdi "I am a Filipino citizen, and am planning to open a new business under the style, 'VGP MERCHANDISING' to deal in the retail and/or wholesale of imported cutlery (scissors, nail cutters and nippers, barber shears, razors, etc.), as well as retail and/or wholesale of general merchandise purchased locally. VGP MERCHANDISING will be the direct importer in the case of the cutlery." You now ask information as regards the tax consequences of your proposed businesses. In reply, I have the honor to inform you as follows: As an importer of cutlery, you are subject to a privilege tax of P20.00 per annum which tax must be paid before you engage in the business pursuant to Section 182 of the Tax Code. The imported cutlery are subject to 7% advance sales tax based on the total landed cost thereof plus 25% mark-up, pursuant to Section 183(b), in relation to Section 186, both of the same Code. As wholesaler or retailer of locally purchased merchandise, you are considered a dealer subject to the graduated annual fixed tax (C-13) prescribed by Section 182(A)(2) of the aforesaid Code. The initial tax is P10.00 and thereafter, the amount of the tax will depend on your gross sales during the preceding year. If your gross sales during the preceding year does not exceed P2,000.00, you are exempt from the tax for the subsequent year. Please observe from the foregoing that as importer and dealer you are engaged in two different lines of businesses for which you are subjected to two different privilege taxes. It is of course understood that the income you will derive from the aforesaid businesses will be subject to the income and additional residence taxes. Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue