Taxability of the Importation of One (1) Unit 1979 Mercedes Benz 280

March 18, 1988 BIR RULING NO. 110-88 101 003-88 110-88 S i r : This refers to your letter dated March 11, 1988 requesting a ruling that your importation of one (1) unit 1979 Mercedes Benz 280 presently under customs custody is not subject to the 10% value-added tax (VAT) but rather to the 30% rate under the old law (i.e. E.O. No. 36) to be based on assessed value, on the ground that said vehicle arrived in August 1978 before the effectivity of Executive Order No. 273. In reply, please be informed that importation begins when the carrying vessel or aircraft enters the jurisdiction of the Philippines with intention to unload therein. Importation is deemed terminated upon payment of the duties, taxes and other charges due upon the articles, or secured to be paid, at a port of entry and the legal permit for withdrawal shall have been granted. (Sec. 1202, Tariff and Customs Code) "As it is in the will of the importer or the owner of the imported goods to choose the moment for making payment of the internal revenue tax from its arrival at the port of Manila until immediately before its withdrawal from the Customhouse, the law in force when the payment is made is the one that should prevail, for human voluntary acts are governed by the laws in force at the time of their performance, unless there is a legal provision to the contrary ." (emphasis supplied, Luzon Brokerage Co., Inc. vs. Posadas, 51 Phil. 305) Accordingly, the aforestated importation is subject to the 10% value-added tax (VAT) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, prior to the release of herein motor vehicle from customs custody pursuant to Section 101 of the Tax Code, as amended by E.O. No. 273 and as implemented by Section 3 of Revenue Regulations No. 5-87. cdt Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner