BIR Ruling No. 377-61

No date supplied BIR RULING NO. 377-61 This is with reference to your letter . . . . , requesting information regarding the taxes to be paid by your client under the following facts and circumstances: prll "Our client is the owner of a Panamanian flag cargo vessel and has entered into a Charty Party with a New York firm to carry a cargo of sugar to be loaded on its vessel in San Carlos and Manila, and from there transported to New York; all freight for the cargo carried to be paid for in New York on the basis of the amount actually carried as shown by official weight certificates on discharge of said cargo." In reply, I have the honor to inform you that under the provisions of Sections 132 and 192 of the National Internal Revenue Code, any one who transports passengers or cargoes from the Philippines must pay P20.00 per annum as a fixed tax and 2% of his gross receipts therefrom as a common carrier's tax. It appears that the business of your client for this particular trip will originate in the Philippines; that the ships operated by it will actually transport freight within the confines of this country; and that the cost of freight will not be dependent upon mileage traveled but upon tonnage loaded. Under those facts, there is no question that your client will be subject to the fixed and percentage taxes prescribed in Sections 182 and 192 of the National Internal Revenue Code. The mere fact that the freight service will be completed abroad and that the freight money will likewise be delivered abroad does not preclude the imposition of the tax. LLpr In addition to the above taxes, your client will be subject to income tax on compensation for transporting cargoes from the Philippines, pursuant to Section 163 of Revenue Regulations No. 2 of the Department of Finance. With reference to your request for information regarding the procedure followed in this jurisdiction in the refund of taxes erroneously or illegally collected, please be further informed that pursuant to the provisions of Section 309 of the Tax Code, it is necessary that a claim for refund is made in writing and filed with the Commissioner of Internal Revenue within two (2) years after the payment of the tax. cda