BIR Ruling No. 299-13

August 2, 2013 BIR RULING NO. 299-13 Sec. 4, NIRC, as amended Safehull Marine Technologies, Inc. Luna St., Global Industrial Park SRF Compound, Subic Free Port Zone Attention: Edward G. Antonio Managing Director Gentlemen : This refers to your letter dated 03 January 2011 requesting for an opinion as to the VAT liability on the importation of military hardware and equipment for the Multi-Purpose Attack Crafts (MPAC) Acquisition Program under the AFP Modernization Program between the seller, your company Safehull Marine Technologies, Inc. and the buyer, the Department of National Defense/Armed Forces of the Philippines (DND/AFP). In reply, please be informed that the power of this Office to interpret and decide matters arising under the Tax Code and other tax laws, subject to review by the Secretary of Finance, is provided under Section 4 of the National Internal Revenue Code of 1997, as amended, which provides, thus: "SEC. 4. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases. The power to interpret the provisions of this Code and other tax laws shall be under the exclusive and original jurisdiction of the Commissioner, subject to review by the Secretary of Finance. The power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under this Code or other laws or portions thereof administered by the Bureau of Internal Revenue is vested in the Commissioner, subject to the exclusive appellate jurisdiction of the Court of Tax Appeals." Based on the foregoing provision, the Commissioner's power to interpret tax laws is restricted only to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws. Thus, if the queries raised do not, in anyway, involve or require the interpretation of the provision of the National Internal Revenue Code of 1997, as amended, or any other tax laws, the BIR is not in the position to issue a ruling thereon. HIaAED It is undoubted that the resolution of your query concerning the party liable for the VAT on the importation of military hardware and equipment calls for the proper interpretation of your contract with DND/AFP and has nothing to do with the clarification of tax laws. Accordingly, this Office regrets to inform you that it cannot issue an opinion regarding your query considering that it is not a proper subject of a BIR ruling. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue