Receipts Derived by a Foreign Airline Company

April 28, 1959 BIR RULING NO. 200-59 Sycip, Gorres, Velayo & Co. Certified Public Accountants 490 San Luis, Manila Gentlemen : Reference is made to your letter dated April 22, 1959 stating the following: "A foreign airline company which is not operating airplane flights in the Philippines has an office in Manila. From its Manila office, the company sells passage tickets for airplane flights for points outside of the Philippines. For example, the company may sell tickets for airplane flights for points in the United States starting from San Francisco to Washington, D.C. While we believe that the receipts from the sale of such tickets are not subject to the 2% common carrier's tax under Section 192 of the Tax Code, because the passage flights do not originate from the Philippines, we would like to have your ruling on this point." In reply thereto, I have the honor to inform you that the receipts derived by a foreign airline company not operating in the Philippines from the sale of tickets in the Philippines covering passage not originating from the Philippines but originating from one point to another point which are both outside the country are exempt from the 2% common carrier's tax. However, gross receipts derived from passage tickets sold by airline companies operating flights in the Philippines covering continuous passage originating in the Philippines to points outside the Philippines, although requiring transshipment from point to point by different airline companies, the tickets for such trans-shipment being sold in the Philippines, are subject to the 2% tax. aisadc Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue