Request for the Issuance of a Certification that Dinagat School of Fisheries, a Government Secondary Educational Institution, is a Tax Exempt Organization

June 15, 1995 BIR RULING NO. 088-95 101 (b) 000-00 088-95 Dinagat School of Fisheries Dinagat, Surigao del Norte Attention: Mr . Pablito T . Encabo Secondary School Principal II Gentlemen : This refers to your letter dated June 6, 1995 requesting for the issuance of a certification that Dinagat School of Fisheries, a government secondary educational institution, is a tax exempt organization. It is represented that as a recipient of one (1) unit vehicle, a Model Dodge Truck Pick-up, with Motor No. 5m-31811270550 and Chassis No. 4332-3(0)63, donated by the United States Agency for International Development, Manila (USAID), the certification is one of the required documents for purposes of tax exemption and registration of the said vehicle with the Land Transportation Office (LTO). In connection therewith, while you are not disclaiming any liability for VAT or ad-valorem tax as the transferee of a tax-exempt vehicle, you would like this Office to issue an Authority to Release Imported Goods (ATRIG) for VAT and excise tax purposes in connection with your request for issuance of Advice of Allotment covering Customs duties and internal revenue tax assessments with the Department of Budget and Management (DBM) pursuant to paragraph 5.1.1.2 of the Joint DBM-COT Circular No. 2-91. In reply, please be informed that as a government educational institution, you are exempt from income tax under Section 26(1) of the Tax Code, as amended. Moreover, said donation is also exempt from donor's tax under Section 94(a) (2) of the same Code. However, as the transferee of a tax-exempt vehicle, you are liable to the 10% VAT pursuant to Section 101(b) of the Tax Code, as amended. You are not subject to ad-valorem tax under Section 149 of the Tax Code, because the configuration of the vehicle you received by way of donation from USAID is not embraced within the class of automobiles. This serves as your Authority to Release Imported Goods for purposes of satisfying the requirement of USAID in effecting not only said donation, but also the registration of said vehicle with the LTO. Very truly yours, RENE G. BAEZ Acting Commissioner