Tax on the Dollar Purchased and Japanese Reparations Vessels

August 21, 1958 BIR RULING NO. 446-58 2nd Indorsement Respectfully returned to the Honorable, the Secretary of Finance, Manila. This refers to the request of the Filipino Shipowners Association for a ruling on the question of whether or not vessels purchased or imported either (a) through dollar purchases or (b) under Japanese Reparations for the use of the consignee thereof, are subject to the compensating tax prescribed in Section 190 of the National Internal Revenue Code. prcd With the enactment of Republic Act No. 1612 which took effect on August 24, 1956 that portion of the provisions of Section 190 which specifically exempts vessels from the compensating tax has been deleted. As a result the exemption in favor of vessels, their equipment and/or appurtenances from compensating tax has been abolished. In view thereof, vessels imported through dollar purchases for the use of the importer thereof are subject to the compensating tax prescribed in Section 190 of the Tax Code beginning August 24, 1956. The provision of Republic Act 1789 applies to vessels procured by private parties under the Reparation Act. The pertinent provisions thereof read as follows: "All reparation goods obtained by the government shall be exempt from the payment of all duties, fees and taxes. Reparations goods obtained by private parties shall be exempt only from the payment of custom duties, consular fees and the special import tax." Under the above quoted provision of law reparation goods obtained by private parties are exempt only from the payment of custom duties, consular fees and the special import tax. As the compensating tax is not one of those specifically enumerated from which the importation of reparation goods by private parties are exempted, such importation are subject to the compensating tax prescribed in Section 190 of the Tax Code. aisadc (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue