Guidelines for determining Cost of Goods Sold or the Basis for Depreciation or Gain or Loss, for articles imported under MAAB (Memorandum to Authorized Agent Banks) No. 50 and other Central Bank Circulars

August 29, 1984 REVENUE REGULATIONS NO. 11-84 SUBJECT : Guidelines for Determining Cost of Goods Sold or the Basis for Depreciation or Gain or Loss, for Articles Imported under MAAB (Memorandum to Authorized Agent Banks) No. 50 and Other Central Bank Circulars TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope . These Regulations are promulgated pursuant to Section 326 of the National Internal Revenue Code, to provide general guidelines for treating foreign exchange acquired and used for importation of certain commodities under MAAB (Memorandum to Authorized Agent Banks) No. 50, as amended by Central Bank Circular No. 955, Series of 1984. SECTION 2 . Cost basis for certain imported commodities . For income tax purposes, in determining (a) the amount representing cost of goods sold under Section 43, in relation to Section 145 and 146 of Revenue Regulations No. 2, otherwise known as the Income Tax Regulations, or (b) the amount representing the basis for depreciation or gain or loss under Section 35 of the National Internal Revenue Code, the value and prices of imported articles or commodities shall be determined in accordance with the provisions of Section 3 of these Regulations. SECTION 3 . Peso Cost of imported articles; additional financial charges . For purposes of determining the Philippine peso cost of articles imported under Section 2 above, the following additional financial charges may be allowed - (a) For importations made during the last quarter of 1983 . For MAAB No. 50 and "no dollar" importations during the last quarter of 1983, the value and prices of imported articles quoted in foreign currency shall be converted into the currency of the Philippines at the guiding rate during that period of P14.002 to US$1.00 plus additional financial charges not exceeding P6.00 for each US dollar. (b) For importations made after 1983 . Beginning January 1, 1984, the value and prices of imported articles quoted in foreign currency shall be converted into the currency of the Philippines at the current rate of exchange of value specified or published, from time to time, by the Central Bank of the Philippines plus additional financial charges not exceeding an amount determined by the Bureau of Internal Revenue, in consultation with the Central Bank of the Philippines and the Philippine Chamber of Commerce and Industry . SECTION 4 . Effectivity . These Regulations shall take effect immediately upon approval. CESAR E.A. VIRATA Minister of Finance Recommending Approval: RUBEN B. ANCHETA Acting Commissioner