Taxability of Intended Sale of Manufacturing Equipment to Quaker Oats Asia, Inc., a Non-Resident Foreign Corporation, for Direct Delivery to the Latter's Client in the Philippines

February 24, 1995 BIR RULING NO. 044-95 100 (b) 000-00 044-95 APV Philippines, Inc. Marcos Alvarez Avenue Talon, Las Pias Metro Manila Attention : Mr . Leopoldo S . Arceo Finance Manager Gentlemen : This refers to your letter dated September 1, 1994 requesting for a ruling on the taxability of your intended sale of manufacturing equipment to Quaker Oats Asia, Inc., a non-resident foreign corporation, for direct delivery to the latter's client in the Philippines. It appears that you are engaged in the business of fabricating industrial/manufacturing equipment for sale to various manufacturing firms; that you plan to sell a certain manufacturing equipment to Quaker Oats Asia, Inc., a foreign company based and operating in Singapore with the latter's instruction that such equipment be delivered to one of its clients in the Philippines; and that you have verbally represented that the same will be paid for in foreign currency. It reply, please be informed that based on the foregoing facts, the transaction involving sale of manufacturing equipment to a non-resident foreign corporation for delivery to a domestic corporation in the Philippines if paid for in acceptable foreign currency inwardly remitted to the Philippines and accounted for in accordance with the rules regulations of the Central Bank of the Philippines, will qualify as a foreign currency denominated sale, hence, zero-rated pursuant to Section 100(a) (2) of the Tax Code (before implementation of R.A. No. 7716). aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue