Tax Exemption of Separation Benefits Paid to Employee Separated from Service by Reason of Health Condition

December 1, 1992 BIR RULING NO. 339-92 132 000-00 339-92 Bengzon, Zareba, Narciso, Cudala Pecson, Bengson & Jimenez 6th Floor, SOL Building Amorsolo St., Legaspi Village Makati, Metro Manila Attention: Atty . Enrico G . Valdez Gentlemen : This refers to your letter dated July 9, 1992, requesting in behalf of your client, SILKAIR (Singapore) PTE LTD., a ruling exempting the latter from excise taxes on petroleum products purchased in the Philippines. cdll It is represented that SilkAir is a corporation duly organized and existing under the laws of Singapore and engaged in international airline business; that on May 14, 1992, the Civil Aeronautics Board approved the petition of SilkAir for issuance of a Temporary Operating Permit (TOP) as a foreign air carrier with routing Singapore/Cebu/Singapore; and that the laws of Singapore exempt Philippine carriers from similar taxes on petroleum products sold to the latter. In support of the above representation, you presented the following documents, viz: (1) Copy of Articles of Association and Certification of the Company's Secretary; (2) Certification of the Civil Aeronautics Board regarding the approval of the petition of SilkAir for Temporary Operating Permit; (3) Certification from Customs and Excise Department, Singapore, that commercial air operating companies enjoy duty exemption from payment of customs duties on petroleum uplifted by the aircraft departing to destinations outside Singapore; and (5) Letter dated September 1, 1992 from Philippine Airlines (PAL) confirming that it is exempt from tax and duty on its fuel purchases in Singapore. Based on the foregoing and since the Cebu link of the route Singapore/Cebu/Singapore is an international flight by an international carrier, the petroleum products purchased by SilkAir and consumed is such flights shall not be subject to excise tax pursuant to Section 132 of the Tax Code, as amended. llcd Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-In-Charge)