BIR Ruling [UN-039-94]

February 8, 1994 BIR RULING [UN-039-94] Customs and Intelligence & Investigation Service Bureau of Customs Port Area, Manila Attention: Ms . Ray M . Allan Acting Director Gentlemen : This refers to your letter dated November 22, 1993, in effect, requesting for a clarification on the taxability of one (1) unit 1988 5-door Nissan Patrol, with an engine displacement of 4169 cc, shipped from the United Arab Emirates on August 12, 1993, and consigned to Saikha H. Hassan, of 1011 Rosedell Blg., Metropolitan Avenue, Makati, Metro Manila. It appears that while the authority to release imported goods issued on November 5, 1993 by the Director of Revenue Region No. 4-A indicated that it is not an automobile hence, subject only to VAT, BIR Ruling No. 229-93 dated May 20, 1993 indicated that it is an automobile subject to both VAT and ad valorem tax. In reply, please be informed that under Executive Order No. 90 as implemented by Finance Department Order No. 34-93 issued on May 19, 1993 and June 10, 1993 respectively, the categorization of imported utility vehicles previously adopted by this Bureau by way of an internal memorandum dated November 14, 1988 and reiterated by BIR-Ruling No. 75-89 dated April 14, 1989 was virtually abandoned in favor of categorization by engine displacement. Based on said order, an imported utility vehicle with year model 1988 to 1992 having an engine displacement of between 2,000 cc to 4,500 cc shall be taxable as a car subject to VAT under Section 101(a) of the Tax Code and to the ad valorem tax at a compromise rate pursuant to Section 149 of the same Code in relation to the adverted Finance Department Order No. 34-93. Consequently, this Office ruled (BIR Ruling No. 377-93 dated September 20, 1993) that imported utility vehicle with year model 1993 and subsequent years which is brought into the Philippines after the effectivity of the aforesaid Department Order No. 34-93 dated June 10, 1993 shall be subject to both VAT and ad valorem tax at the full rate. Such being the case, an imported 5-door Nissan Patrol which arrived at the Port of Manila from the United Arab Emirates on August 12, 1993 shall be subject to both VAT and ad valorem tax at the full rate pursuant to Section 101 (a) and 149 of the Tax Code, as amended. (BIR Ruling No. 377-93 dated Sept. 20, 1993) cdtech Very truly yours, JAIME M. MAZA Assistant Commissioner Legal Service