Exemption from the Fixed and Percentage Taxes — Handling and Transporting of Household Goods

1981 BIR RULING NO. 076-81 207-00 118-79 076-81 Angara, Abello, Concepcion, Regala & Cruz Law Offices 5th Floor, ACCRA Building 122 Gamboa Street Legaspi Village Makati, Metro Manila Attention: Atty . Jose Mario C . Bunag Gentlemen : In reply to your letter dated December 11, 1980, I have the honor to inform you that the services being rendered by your client-concessionaire by virtue of an agreement with the U.S. Government regarding the handling and transporting of household goods and unaccompanied baggages from the Clark Air Base to the 48 contiguous states of the United States shall not be subject to fixed and percentage taxes on business for the following reasons: 1. For services your client renders within the Base, the same are not subject to fixed and percentage taxes imposed by the Philippine Government by virtue of Section 1, Art. XVIII of the US-PI Military Bases Agreement exempting from taxation Government agencies, including concessions, dispensing service to, and exclusively for U.S. Military Forces and authorized civilian personnel and their families in such bases. 2. For services your client renders from the Base to the 48 contiguous states of the United States, the same are also not subject to fixed and percentage taxes for the reason that the Philippine Government cannot reach the same by taxation for lack of territorial jurisdiction. (BIR Ruling No. 118-79, December 12, 1979). Your client, however, is liable to pay income tax on whatever income derived from the work done within the Base (Naguiat vs. Araneta, 104 Phils. 962; Canlas and Manila Pencil Go. vs. Republic, et al. 103 Phils. 712) and abroad. Very truly yours, RUBEN B. ANCHETA Acting Commissioner