Grant of Request for Exemption from the 10% Overseas Communications Tax

May 2, 1984 BIR RULING NO. 084-84 290-A-037-80-084-84 Gentlemen : This refers to your request for reconsideration of BIR Ruling No. 290-A-000-00-037-80 dated October 27, 1980 subjecting you to the 10% overseas communications tax prescribed by Section 290-A of the Tax Code. In a letter dated February 23, 1983 the Ministry of Foreign Affairs furnished this Office a copy of Diplomatic Note No. 60 dated February 4, 1983 of the United States Embassy concerning the question of the tax exempt status of that military banking facility. In reply, please be informed that after a re-study of the additional papers subsequently submitted, this Office hereby grants your request for exemption from the 10% overseas communications tax prescribed by Section 290-A of the Tax Code. It appears that in the exchange of notes between the U.S. Embassy and the Department (now Ministry) of Foreign Affairs of the Philippine Government, the United States Treasury established in the U.S. Naval Base at the Subic Bay, Zambales, pursuant to Article XVIII of the R.P.-U.S. Military Bases Agreement; that on March 14, 1966, the United States Treasury Department designated you as its agent to operate the U.S. Treasury Facility at Subic Bay, Zambales, for the exclusive use of the U.S. military forces and authorized civilian personnel and their families. Under Article XVIII of the R.P.-U.S. Military Bases Agreement, sales and services within the bases are exempt from all taxes, duties and inspection by Philippine authorities. In other words, this Office hereby recognizes you as an agency of the Treasury Department of the U.S. Government to operate a Treasury Facility at the U.S. Naval Base at Subic, Zambales, and enjoying tax exemption which the Government of the Philippines is committed to recognize pursuant to an international agreement [(Sec. 290-A (b)(iii), Tax Code)]. This revokes BIR Ruling No. 290-A-000-00-37-80. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner