BIR Ruling No. 074-83

April 29, 1983 BIR RULING NO. 074-83 Gentlemen : This refers to your letter dated September 26, 1981 inquiring whether the charter hire of a foreign vessel chartered by a Philippine national under P.D. 866, as amended by P.D. 1711, is subject to tax, and if so, the tax to be paid by the charterer. In reply, I have the honor to inform you that rentals or charter fees payable to nonresident owners of vessels chartered by Philippine national as the term is defined under Section 3(c) of P.D. 474, and which charter or lease has been duly approved by the Maritime Industry Authority, shall be subject to 4.5% final tax pursuant to Section 24(b)(1)(v) of the Tax Code as amended, to be withheld by the charterer, the return and payment of which shall be in accordance with Section 53 and 54 of the same Code. If the charterer uses the vessel in the business of transporting passengers and freights for compensation it is subject to the annual fixed tax of P100.00 pursuant to Section 192(1) of the Tax Code and to the common carrier's tax equivalent to 2% of its quarterly gross receipts pursuant to Section 207 of the same Code. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue