BIR Ruling No. 108-82

April 6, 1982 BIR RULING NO. 108-82 204-00 000-00 108-82 Central Bank of the Philippines M a n i l a Attention: Mr . E . B . Jugo Acting Director Foreign Exchange Department Gentlemen : This refers to your letter dated January 25, 1980 requesting clarification whether or not Offshore Banking Units authorized to operate in the Philippines under P.D. No. 1034, may continue to enjoy the exemption granted under Section 7(f) of P.D. No. 1034 to their importations of office machineries, equipment and supplies for their exclusive use in view of P.D. No. 1395, amending P.D. No. 1352. cdtech In reply, I have the honor to inform you that Section 7(f) of P.D. No. 1034 which provides that "the offshore banking units shall be exempt from all forms of local licenses, fees, dues, imposts, or any other local taxes or burdens", refers to exemption of offshore banking units from the payment of local taxes imposed under P.D. No. 231, as amended, otherwise known as the Local Tax Code. Said provision, therefore, does not cover taxes imposed under the National Internal Revenue Code. Consequently, importations of offshore banking units of office machineries, equipment and supplies are subject to the corresponding compensating tax depending upon classification of the articles imported and not to the preferential rate of 5% internal revenue tax prescribed by P.D. No. 1395. Very truly yours, RUBEN B. ANCHETA Acting Commissioner