Tax-free Transfer of an International Panel Truck and Chassis to Manila Pencil Co., Inc.

January 15, 1958 BIR RULING NO. 029-58 Mr. Prisco N. Evangelista Lawyer-Certified Public Accountant 315 Calvo Bldg., Escolta Manila S i r : Reference is made to your letter dated September 27, 1957, requesting for and in behalf of your client, Mr. D. P. Canlas, authority to transfer tax-free one (1) International panel truck and one (1) truck chassis to the Manila Pencil Co., Inc., a grantee of tax-exemption privilege under Republic Act No. 901 in respect to its business of manufacturing lead pencils. In an interview we had with you, you alleged that said truck and chassis had been imported tax-free by Mr. Canlas who is, under the Military Bases Agreement, a tax-exempt person. In answer thereto, I have the honor to inform you that, it appearing that the exemption granted to said company, in accordance with Section 1 of Republic Act No. 901, is limited to such taxes as are directly payable by it in respect to the manufacture of lead pencils, the contemplated transfer of the truck and chassis in question is subject to the 7% compensating tax, pursuant to Section 190, in relation to Section 186, of the Tax Code, as amended. Said tax is payable by the Manila Pencil Co., Inc. who is, pursuant to Republic Act No. 1511, considered the importer of the truck and chassis. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue