Embassy of the United States of America

September 1, 2022 ITAD BIR RULING NO. 016-22 Article VII (1) PH-US Visiting Forces Agreement Embassy of the United States of America 1201 Roxas Boulevard, Ermita 1000 Manila Attention: Heather C. Variava Charg d' Affaires, a.i. Gentlemen : This refers to your letter dated May 20, 2022 requesting confirmation that the local purchases of petroleum products by Stonewin International LLC (Stonewin), on behalf of the United States (US) Armed Forces and in connection with the latter's activities in US 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). It is represented herein that the US Defense Logistics Agency (DLA) has awarded to Stonewin the contract to purchase fuel on behalf of the United States Army, Air Force, Navy and Marine Corps; that Stonewin's local supplier of fuel is Phoenix Petroleum Philippines, a fully integrated oil company that produces and manufactures petroleum products in the Philippines; and that the contract was established to supply jet fuel (JA1), diesel fuel (DF2) and gasoline (MUP) to the US Armed Forces 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); and 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, 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 Philippines Government." (Emphasis supplied) Based on the above provision, US Government supplies imported into or acquired in the Philippines by or on behalf of the US Armed forces, in connection with the activities covered by the PH-US Visiting Forces Agreement, shall be free of all Philippine taxes. In other words, the following conditions must concur when claiming exemption from the payment of excise taxes: 1. the jet fuels, diesel and gasoline must be acquired from local manufacturers or producers; 2. the acquisition must be made by or on behalf of the US armed forces; and 3. these supplies must be used in connection with the activities covered by the VFA. Considering that the subject purchase of petroleum products meets the above conditions, this Bureau is of the opinion as it hereby rules that the purchase of jet fuels, diesel and gasoline by Stonewin from Phoenix Petroleum Philippines for the use of the US Armed Forces, in connection with their activities in the above-listed installations/bases, is exempt from Philippine taxes pursuant to the PH-US Visiting Forces Agreement. This ruling shall apply to subsequent purchases of petroleum products on behalf of the US Armed Forces provided that the aforestated conditions are satisfied. Very truly yours, (SGD.) LILIA CATRIS GUILLERMO Commissioner of Internal Revenue