Tax Liability of Bethel Carbon Corporation

November 28, 1960 BIR RULING NO. 508-60 Messrs. Gil R. Carlos & Associates Attorneys-At-Law 460-468 Regina Building Escolta, Manila Gentlemen : Reference is made to your letter dated October 20, 1960, stating the following: cdt "The Bethel Carbon Corporation, a corporation organized and existing under the laws of the State of New York, which is not licensed to do business in the Philippines, intends to enter in to a contract with the Iba Chromite Mining Co., Inc., a corporation organized and existing under the laws of the Philippines, whereby the former would undertake exploration works on several mining claims owned by Iba Chromite located in Zambales, such exploration program to be conducted and terminated until Bethel Carbon has satisfied itself whether or not the claims can be economically exploited on a sufficient commercial scale, but for a period not longer than 18 months from the date of the contract." You now request information as to the taxes if any, to which Bethel Carbon Corporation may be subject and whether or not any machinery and equipment which may be brought in connection with the exploration work but which shall be shipped to the U.S after the termination of the exploration work are subject to tax. In reply thereto, I have the honor to inform you that, under the above-stated facts, Bethel Carbon Corporation is not subject to any tax, it appearing that the exploration work is only done for its own account and without any compensation. Any equipment and machinery which may be brought to the Philippines for direct use in the exploration work, but which are to be reshipped to the United States after the exploration work, but which according to you will not be longer than 18 months, are also not subject to tax, except trucks and cars. However, a suitable surety bond should be file to guarantee reshipment of the equipment and machinery. Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue