Stonewin International LLC

April 12, 2023 ITAD BIR RULING NO. 007-23 Article VII (1) PH-US Visiting Forces Agreement Stonewin International LLC c/o Stonewin Management Ltd. 22-24 Scale Street St. Helier, Jersey JE2 3QG Channel Islands Attention: _____________________ Gentlemen : This refers to your letter dated January 10, 2023 requesting confirmation that the petroleum products acquired by Stonewin International LLC (Stonewin) from local manufacturers, producers and suppliers on behalf of the United States Armed Forces (USAF), and in connection with the USAF's activities in its military locations in the Philippines are exempt from all taxes pursuant to the Agreement between the Government of the United States of America and the Government of the Republic of the Philippines regarding the Treatment of United States Armed Forces Visiting the Philippines (PH-US Visiting Forces Agreement). cSEDTC It is represented that the US Defense Logistics Agency has awarded to Stonewin the contract to purchase fuel on behalf of the United States Army, Air Force and Marine Corps; that Stonewin's local suppliers of fuel are Phoenix Petroleum Philippines and Petron Corporation Philippines, fully integrated oil companies that produce, manufacture, and supply petroleum products in the Philippines; and that the contract was established to supply jet fuel (JA1), diesel fuel (DF2) and gasoline (MUP) to the USAF located in the following installations/bases in the Philippines: 1. Manila City Camp Aguinaldo (JA1 and DF2) 2. Fort Ramon Magsaysay, Palayan City, Nueva Ecija (JA1) 3. Zamboanga City (Edwin Andrews Air Base) (DF2 and JA1) 4. Zamboanga (Camp Navarro) (MUP, DF2 and JA1) In reply, please be informed that Article VII (1) of the PH-US Visiting Forces Agreement provides that: "Article VII Importation and Exportation 1. United States Government equipment, materials, supplies, and other property imported into or acquired in the Philippines by or on behalf of the United States armed forces in connection with activities to which this agreement applies, shall be free of all Philippine duties, taxes and other similar charges . Title to such property shall remain with the United States, which may remove such property from the Philippines at any time, free from export duties, taxes, and other similar charges. The exemptions provided in this paragraph shall also extend to any duty, tax, or other similar charges which would otherwise be assessed upon such property after importation into, or acquisition within, the Philippines. Such property may be removed from the Philippines, or disposed of therein, provided that disposition of such property in the Philippines to persons or entities not entitled to exemption from applicable taxes and duties shall be subject to payment of such taxes, and duties and prior approval of the Philippine Government." (Emphasis supplied) AIDSTE Based on the above provision, all equipment, materials, supplies, and other property imported into or acquired in the Philippines by or on behalf of the USAF in connection with the activities covered by the PH-US Visiting Forces Agreement shall be free of all Philippine duties, taxes and other similar charges. Thus, when claiming exemption from the payment of taxes usually imposed on equipment, materials and supplies and other property acquired in the Philippines, the following conditions must be satisfied: 1. the equipment, materials, supplies, including but not limited to, petroleum products, and other property must be acquired from local manufacturers, producers or suppliers; 2. the acquisition must be made by or on behalf of the US armed forces; and 3. these equipment, materials and supplies and other property must be used in connection with the activities covered by the VFA. Considering that the subject purchases meet the above conditions, this Bureau is of the opinion as it hereby rules that the purchases of jet fuels, diesel and gasoline by Stonewin from Phoenix Petroleum Philippines and Petron Corporation Philippines for the use of the US Armed Forces, in connection with their activities in the above-listed installations/bases, are exempt from Philippine taxes pursuant to the PH-US Visiting Forces Agreement. This ruling shall squarely apply to all purchases of equipment, materials, supplies and other property from any local manufacturer, producer or supplier made or to be made by Stonewin on behalf of the USAF, provided that the aforestated conditions are satisfied. Very truly yours, (SGD.) ROMEO D. LUMAGUI, JR. Commissioner of Internal Revenue