Tankers (M/T) are Considered as International Carrier

April 7, 1989 BIR RULING NO. 060-89 132 000-00 060-89 S i r : This refers to your request for information on the following queries: "1. Are tankers (M/T) considered as international carrier under Section 132 of the Tax Code? "2. It is necessary that there be an agreement (bilateral tax treaty) between the Philippines and a foreign country before delivery of petroleum products can exempt from tax even if the latter country does not levy any tax whatsoever?" In reply, please be informed as follows: 1. Any aircraft or vessel transporting passengers of cargoes from the Philippines to other countries, or vice-versa, is an international carrier. Accordingly, tankers sailing from other countries to the Philippines, or vice-versa, shall be considered international carriers within the purview of Section 132 of the Tax Code. 2. No formal agreement between the Philippines and the country where the vessel is registered is necessary for purposes of the exemption from excise tax of the sale of petroleum products to said international carriers as contemplated in Section 132 of the Tax Code. However, the existence of a law providing similar excise tax exemption to a Philippine registered vessel buying petroleum products while docked in the port of the country where the foreign vessel is registered, for its use or consumption in international waters shall be evidenced by duly authenticated documents issued by duly authorized officials of the country of said carrier attesting to the fact that said country grants similar tax exemption on petroleum product sold to Philippine carriers pursuant to Revenue Regulations No. 5-78. Very truly yours, (SGD.) JOSE U. ONG Commissioner