Importations of Agricultural Machinery and Irrigation Equipment Exempt from Compensating Tax

June 29, 1981 BIR RULING NO. 100-81 204-00 72-81 100-81 Farm Systems Development Corporation Rudgen Building No. 17, Shaw Boulevard Pasig, Metro Manila Attention: Mr . Teodoro C . Rey, Jr . Administrator Gentlemen : This refers to your letter dated December 4, 1980 requesting exemption from the payment of (1) compensating tax on your forthcoming importations of agricultural machinery and irrigation equipment, and (2) withholding taxes on interest income on bank deposits and marketable securities. In reply, I have the honor to inform you that Section 13 of P.D. No. 681 (the decree creation FSDC) which grants that Corporation exemption from all taxes, including income tax and compensating tax, for ten (10) years from April 4, 1975 (effective date of P.D. No. 681), had been incorporated as Section 14 of the amendatory decree, P.D. No. 1595. This Office has already ruled that you are not covered by P.D. No. 1177 which requires government entities to pay income taxes, customs duties and other taxes effective July 30, 1977, since P.D. No. 1595 incorporating your tax exemption is a later law. (BIR Ruling No. 024-cc-000-00-72-81) In view thereof, your importations of agricultural machinery and irrigation equipment are exempt from the compensating tax imposed by Section 204 of the Tax Code. As regards your request for tax exemption on your interest income on bank deposits and marketable securities, the same has already been acted upon under the said BIR Ruling No. 024-cc-000-00-72-81. Very truly yours, RUBEN B. ANCHETA Acting Commissioner