Exemption from Payment of Specific Tax — Positive Film Rushes

February 8, 1980 BIR RULING NO. 027-80 F. B. Santiago, Sansano, Calabio & Associates Law Offices Suite 705, Fedman Suites Condominium Salcedo St., Legaspi Village Makati, Metro Manila Attention: Atty . Alexander F . Sansano Gentlemen : This refers to your letters dated February 22, May 28 and August 28, 1979 requesting that your client, Pan Pacific Productions, be exempted from the payment of specific tax on its importation of positive film rushes. You have represented that Pan Pacific Productions is a foreign corporation intending to return to the Philippines to shoot more motion pictures for international releases; that said corporation has long completed the principal photography of the motion picture entitled "Night Games" which was shot in the Philippines and whose positive film rushes have been shipped out of the Philippines free from specific tax under Authority To Release Imported Goods issued by the Bureau of Internal Revenue; that in doing the "Night Games" photography, Pan Pacific Productions brought into the Philippines negative films or raw stocks which were released by the Bureau of Customs under a re-export bond; that in the process of completing the film's photography, the Film Director exposed the raw stocks and the exposed portions were shipped out of the Philippines for processing; that after undergoing processing abroad, said portions were sent back to the Philippines as positive film rushes for exclusive use and viewing of the Film Director in order to determine whether a clear picture of the sequence is obtained; and that after such viewing by the Director, the film rushes were sent back abroad. Under the foregoing circumstances, you now request for a confirmation ruling that positive film rushes are exempt from specific tax. In reply, I have the honor to inform you that considering that positive film rushes are raw materials which are incomplete parts of a cinematographic film in production and not ready for public exhibition, it is the opinion of this Office that positive film rushes are exempt from the payment of specific tax prescribed in Section 157 of the Tax Code of 1977, as amended. It should be understood however, that the exemption shall be granted only after proper verification by this Office that the film sequence or positive film rushes of a particular photography are incomplete parts of a cinematographic film in production and not ready for public exhibition. Very truly yours, RUBEN B. ANCHETA Acting Commissioner