BIR Ruling No. 123-83

July 5, 1983 BIR RULING NO. 123-83 Gentlemen : This refers to your letter dated September 2, 1982 requesting a ruling as to the rate of tax and the withholding tax requirements applicable to the Filipino crewmen of the vessels of your subsidiary companies. It is represented that the PNOC Tankers Corporation, Petrophil Tankers Corporation, Petron Tankers Corporation, PNOC Oil Carriers, Inc., PNOC Petroleum Carriers Corporation and PNOC Crude Oil Tankers, Inc., all wholly-owned subsidiaries of the Philippine National Oil Company (PNOC), each owns an international vessel that brings crude oil and other petroleum products into the country; that all of these corporations were incorporated locally and the crewmen of their vessels are mostly Filipinos; that the vessels spend most of the year either steaming to and from your Middle East and other foreign suppliers or waiting to be loaded at the port of such suppliers; that drydocking is likewise done generally abroad; and that the salaries of the crewmen are mostly paid in this country. In reply thereto, I have the honor to inform you that based on the foregoing facts, the Filipino crew members of the vessels owned by your subsidiary companies are considered resident citizens subject to tax under Section 21(a) of the Tax Code, as amended by B.P. Blg. 135. Consequently, each of such companies are constituted as the withholding agents of the government and are, therefore, under obligation to deduct and withhold the corresponding income tax on the Filipino crew-member's salaries in accordance with Section 7(1) of Revenue Regulations No. 6-82 dated October 1, 1982 implementing section 21(a) of the Tax Code, as amended by B.P. Blg. 135. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue