BIR Ruling No. 036-64

May 15, 1964 BIR RULING NO. 036-64 Paramount Chemical Industries, Inc. Concepcion Valley, Marikina Rizal Gentlemen : With reference to your letter dated February 3, 1964, requesting information on whether or not the advance sales tax paid by your company during the latter part of December, 1963 for raw materials and supplies to be used in the manufacture of your products in 1964 may be deferred and considered as an ordinary expense for the current year, I have the honor to inform you as follows: Normally, taxes are deductible in the year when paid or accrued. However, since you have not yet earned income in 1963 because you started operations only this year, the advance sales tax paid on the raw materials imported in 1963 may be considered as part of cost of the raw materials. In effect, therefore, you could avail of the deduction of the advance sales tax paid in 1963 although no longer as a tax but as an item of cost. LibLex Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue