Tax Consequence of a Donation

March 23, 1990 BIR RULING NO. 033-90 101 (a) 149 000-00 033-90 Gentlemen : This refers to your letter dated March 6, 1990, in effect, requesting a ruling on the tax consequence of a donation of 10 Police Patrol Cars made by KIA Motors of Seoul, South Korea, to the Philippine Government through that Office. It appears that your office purchased 200 units of Besta ambulance from KIA Motors and that you distributed the same by way of donations to different beneficiaries all over the country; that out of goodwill, KIA Motors has donated to the Philippine Government 10 KIA Pride Police Patrol Cars; that same importation is being consigned to your office as indicated under Bill of Lading No. APL-005022657. In reply, please be informed that as the consignee of the aforesaid importation you are the importer who is liable for the tax due thereon. Since your charter, R.A. 1169 as amended by B.P. 42 does not provide for tax exemption on your importation of goods, you are subject to VAT and ad valorem tax under Sections 101(a) and 149 respectively of the Tax Code, pursuant to Section 1205 of the Tariff and Customs Code reading "Sec. 1205. Importations by the Government . Except those provided for in Section One Hundred and Five of this Code, all importations by the government for its own use or that of its subordinate branches or instrumentalities, or corporations, agencies or instrumentalities owned or controlled by the government, shall be subject to the duties, taxes, fees and other charges provided for in this Code." cd Very truly yours, (SGD.) JOSE U. ONG Commissioner