Importation of Five (5) Units of Donated Second-Hand Cars

December 12, 1989 BIR RULING NO. 250-89 101 (a) 000-00 250-89 Gentlemen : This refers to your letter dated September 5, 1989, in effect requesting a ruling that your importation of five (5) units of donated second-hand cars be exempt from VAT and excise tax. cdta It is represented that your cooperative with roughly 55,000 small farmer-members all over the province of Pampanga is duly organized and registered under PD 175 with the Bureau of Cooperatives Development of the Department of Agriculture and Food; that the cooperative is setting up and will operate in Pampanga a medium sized poultry feed mill and jute sack-making factory in Pampanga; that you will acquire the required machineries, equipment and technology from the People's Republic of China on a long-term repayment basis through the China National Machinery & Equipment Import and Export Corporation; and that one of the conditions for the Technology Transfer Agreement is for the cooperative to provide housing and transportation facilities to its technicians; that for the said purpose and in view of the inadequate financing, you have tapped your Japanese friends for assistance, who responded by offering to donate among others five (5) units of second-hand reconditioned cars (Toyota and Nissan) model 1983 to 1985. In reply, I regret to inform you that your request for exemption from VAT and excise taxes of your importation of five (5) second-hand cars has to be, as it is hereby denied for lack of legal basis. Accordingly, your importation of cars will be subject to 10% VAT pursuant to Section 101(a) of the Tax Code, as amended by Executive Order No. 273, and to the excise ( Ad Valorem) tax, ranging in rates from 15% to 100%, under Section 149 of the same Code. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner