Sale of Pianos to U.S. Military Establishments is Exempt from 30% Sales Tax but Income Derived from such Sale is SUbject to Income Tax
BIR Ruling No. 150-87 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Jun 2, 1987
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June 2, 1987 BIR RULING NO. 150-87 163 (1) (h) 000-00 150-87 Gentlemen : This refers to your letters dated October 24, 1986 and March 16, 1987 requesting a ruling on whether you are subject to the sales tax on your pianos ordered by the U.S. Navy Exchange and U.S. Army Air Force Exchange at Subic Naval Base and Clark Air Force Base respectively, for sale to U.S. military personnel. In reply, please be informed that your sales of pianos to the aforesaid military establishments are exempt from the 30% sales tax imposed by Section 163 (1))(h) of the Tax Code, as amended by Executive Order No. 36, pursuant to Article XVIII of the P.I.-U.S. Military Bases Agreement. (Araneta vs. Manila Pencil Co., G.R. No. L-8182, June 29, 1957) However, you are subject to income tax on the income derived by you on the said sales to U.S. military personnel. (Naguiat vs. Araneta, 104 Phil. 962, Canlas vs. Manila Pencil Co., 103 Phil. 712) Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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