BIR Ruling No. 249-82

September 29, 1982 BIR RULING NO. 249-82 024 000-00 249-82 Philippine Shipyard and Engineering Corp. 2nd Floor, PPL Bldg., U.N. Avenue M a n i l a Attention: Mr . Generoso T . Tanseco President Gentlemen : This refers to your letter dated September 10, 1982 requesting a ruling as to whether Philippine Shipyard and Engineering Corporation (PHILSECO) is subject to the 8% final tax imposed by Presidential Decree 1354 as implemented by Revenue Regulations No. 15-78 on income derived from drydocking and repair of J. Ed. Warren, a 110,000 DWT tanker operated by Philippine Cities Service Inc. (PCSI) a domestic corporation engaged in petroleum exploration/drilling operations. It is represented that PHILSECO is a domestic corporation engaged in the construction, operation and management of a ship repair facility at Cabangaan, Subic, Zambales; that PHILSECO undertook the repair of J. Ed. Warren from June 23, 1982 to July 10, 1982; that of the total repair work amounting to P907,204.22 paid to PHILSECO, the sum of P72,576.34 representing 8% final income tax was withheld by Philippine Cities Service Inc. cdtech In reply, I have the honor to inform you that since PHILSECO merely undertook the drydocking and repair of a vessel operated by PCSI, it is not considered a subcontractor within the purview of Section 2 (b) of Revenue Regulations No. 15-78 implementing Presidential Decree No. 1354. Accordingly, PHILSECO is not subject to the final income tax equivalent to eight per cent (8%) of its gross income derived from its contract with PCSI. Very truly yours, RUBEN B. ANCHETA Acting Commissioner