Cars, Trucks and Similar Equipment Imported for Sub-lease Subject to Compensating Tax

June 23, 1966 BIR RULING NO. 026-66 Mr. Francis R. Maher Graphic Arts & Business Consultant 38 Sampaloc Ave., Quezon City S i r : This refers to your letter dated April 18, 1966 relating to the following: "Some business friends of mine in the United States are planning to establish in the Philippines a company to go into commercial leasing of industrial equipment, cars and trucks including other similar equipment. This would also include printing machinery and equipment. One of the points that they have asked us to clarify is if equipment that will be leased by a company abroad to a Philippine corporation which will be set up will in turn sub-lease this to the end user could import this equipment free of advance sales tax under bond. On this basis would be re-exported from the Philippines. In some cases, if the equipment were not re-exported, then at that time, the sales tax would be paid. The company that is to be established here to engage in leasing will be a combined Filipino-American company." In reply, I have the honor to inform you that the cars, trucks and similar equipment to be imported for the purpose of sub-lease shall be subject to the compensating tax notwithstanding the fact that they are subsequently to be re-exported (Opinion No. 48, s. 1961, Secretary of Justice). aisadc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue This is to certify that the above ruling was duly signed by the Commissioner of Internal Revenue on June 23, 1966. PRISCILLA R. GONZALES Asst. Revenue Operations Head (Legal)