In the Matter of Amending COMELEC Resolution No. 10332 Promulgated May 11, 2018 and Deletion of Section 7 Thereof

March 2, 1988 BIR RULING NO. 067-88 103 (g) 000-00 067-88 Gentlemen : This refers to your letter dated January 25, 1988 stating that you are planning to sell your vessel, M.V. Balatoc; that when you imported said vessel in 1981, you were exempted from the payment of customs duty and compensating tax by virtue of Presidential Decree No. 215. You now request information as to whether the prospective buyer of said vessel who will use it in the domestic trade on a permanent basis will pay the corresponding customs duty and compensating tax. In reply, please be informed that Section 169 of the Tax Code which imposes compensating tax on commodities or goods brought into the Philippines was already repealed by Executive Order No. 273 effective January 1, 1987. Beginning January 1, 1988, a value-added tax equivalent to 10% is imposed on every importation of goods. [Section 101(a), Tax Code as amended by E.O. No. 273] Accordingly, since your importation of M.V. Balatoc was exempted from customs duty and compensating tax by virtue of Presidential Decree No. 215, on the subsequent sale of the vessel to non-exempt persons or entities, the purchaser under Section 101(b) of the Tax Code as amended, shall be considered the importer thereof who shall be liable for any internal revenue tax such as, to the 10% value-added tax, on the said importation. However, pursuant to Section 103(g) of the Tax Code as amended, the importation of passenger and/or cargo vessel of more than ten thousand tons, whether coastwise or ocean-going, including engine and spare parts of said vessel to be used by the importer himself as operator thereof shall be exempt from the value-added tax. In view of the foregoing considerations, this Office is of the opinion as it hereby holds that if the vessel to be sold by you is more than ten thousand tons and will be used by the buyer himself as operator thereof, the same shall not be subject to the value-added tax. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner