World Aviation International Services Corporation

September 7, 2018 BIR RULING NO. 1169-18 Sec. 109 (1) (T) of the NIRC of 1997, as amended; BIR Ruling No. 595-2012 World Aviation International Services Corporation 2316 Kia Motor Sales Corp.,Aurora Blvd.,Andrews Ave. Tramo Barangay 178, Pasay City Attention: AAA _______________ Gentlemen : This refers to your letter dated June 26, 2018, requesting on behalf of the World Aviation International Services Corporation for tax exemption on the importation of three (3) aircrafts, pursuant to Section 109 (1) (T) of the National Internal Revenue Code of 1997, as amended. Documents submitted disclosed that World Aviation International Services Corporation, with Taxpayers Identification Number (TIN) 009-282-562-000, is a domestic corporation organized and registered with the Securities and Exchange Commission (SEC) under Company Registration No. CS201608566; that it is a licensed aircraft operator thru its Air Operator Certificate (AOC) issued by the Civil Aviation Authority of the Philippines (CAAP),authorized to perform commercial air operations, as defined in the Operations Specifications, in accordance with the Operations Manual and Part 9 of the Philippines Civil Aviation Regulations, series of 2008; that the CAAP issued various Certifications interposing no objection to the importation of three (3) aircrafts, with the following descriptions: Specification Aircraft 1 Aircraft 2 Aircraft 3 Manufacturer Quest Aircraft Company, LLC Quest Aircraft Company, LLC Quest Aircraft Company, LLC Aircraft Model Kodiak 100 Kodiak 100 Kodiak 100 Aircraft Serial Number SN 100-0171 SN 100-0183 SN 100-0169 Registry Number RP-C 1220 RP-C 511 RP-C 169 Engine Manufacturer Pratt & Whitney Canada Pratt & Whitney Canada Pratt & Whitney Canada Engine Model PTGA-34 PTGA-34 PTGA-34 Engine Serial Number PCE-RB 1020 PCE-RB 0974 PCE-RB 0933 Place of Origin USA USA Japan Port of Entry Puerto Princesa, Palawan Puerto Princesa, Palawan Laoag, Ilocos Norte Date of Arrival February 17, 2017 July 19, 2017 November 21, 2017 and that on December 05, 2016, the Civil Aeronautics Board (CAB) approved the application of World Aviation International Services Corporation for the issuance of its Certificate of Public Convenience and Necessity (CPCN) to Operate Domestic Non-Scheduled (Air Taxi) and International Non-Scheduled Air Transportation Services valid for five (5) years, effective from November 29, 2016 up to November 28, 2021. CAIHTE In reply, please be informed that Section 109 (1) (T) of the National Internal Revenue Code of 1997, as amended, provides as follows: "SEC. 109. Exempt Transactions . (1) Subject to the provisions of subsection (2) hereof, the following transactions shall be exempt from the value-added tax . xxx xxx xxx (T) 1 Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations." Based on the above-cited provision, the importation of an aircraft destined for domestic transport or international transport operations shall be exempt from value added tax (VAT). In relation thereto, Section 4.109-1 (B) (1) (t) of Revenue Regulations (RR) No. 16-2005, as amended, which implements the above-quoted provision, states that: "SECTION 4.109-1. VAT-Exempt Transactions. x x x (B) Exempt Transactions . (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from VAT: xxx xxx xxx (t) Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations: Provided, however, that the exemption from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject to the requirements on restriction on vessel importation and mandatory vessel retirement program of Maritime Industry Authority (MARINA)." Accordingly, the importation of the three (3) aircrafts with Aircraft Serial Nos. SN 100-0171, SN 100-0183, and SN 100-0169 by World Aviation International Services Corporation for its domestic non-scheduled (air taxi) and international non-scheduled air transportation services is exempt from the payment of VAT. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. aScITE Very truly yours. (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Renumbered by Republic Act (RA) No. 10378.