Exemption from Taxes Directly Liable

July 29, 1981 BIR RULING NO. 134-81 205-00 133-79 134-81 Asian Development Bank 2330 Roxas Blvd. Metro Manila Attention: Mr . R . B . Lyon Acting Chief Officer of Administrative Services Gentlemen : This refers to your letter dated September 19, 1980 requesting confirmation of your opinion that the goods and services procured by you are exempt from the sales tax, contractor's tax and other taxes due thereon. It appears that under the Agreement establishing the Asian Development Bank, "the Bank, its assets, property, income and its operations and transactions, shall be exempt from all taxation . . .." (Emphasis ours) In reply, please be informed that under the foregoing tax exemption provision, you are only exempt from taxes for which you are directly liable. In connection with your operations and transactions, you procure goods and services which are subject to the sales tax and contractor's tax. These taxes are directly payable by the manufacturers and contractors, respectively. The fact that said taxes may ultimately be shifted to or passed on to you will not constitute the same as taxes payable by you for purposes of the exemption. (Philippine Acetylene Co., Inc., vs. Commissioner of Internal Revenue, G.R. No. L-19707, August 17, 1967). cdtech In view thereof, it is regretted that your request cannot be granted in view of the jurisprudence on the matter as enunciated by our Supreme Court. Very truly yours, RUBEN B. ANCHETA Acting Commissioner