VAT Ruling No. 037-00

September 25, 2000 VAT RULING NO. 037-00 Sec. 105 (j) 000-00 Hon. Orlando Mercado Secretary of National Defense Camp Gen. Emilio Aguinaldo Quezon City Dear Secretary Mercado : This refers to your letter dated August 15, 2000 in connection with the importation of defense equipment/systems by foreign exhibitors to the forthcoming 9th International Defense Equipment Exhibition and Conference to be held in the Philippines from September 28 - 29, 2000. It has been confirmed by the Department of Finance that articles imported exclusively for exhibition purposes may be released conditionally tax- and duty-free , pursuant to Section 105(j) of the Tariff and Customs Code, as amended, subject to the following stated conditions: (i) posting of a bond equal to one and one half (1-) times of the ascertained duties and taxes due thereon; (ii) recommendation and certification of the Department of Defense that the importers-exhibitors are invited to or are participants in the event; (iii) affidavit of the importer/consignee stating that the articles imported will be exclusively used for exhibition purposes and will be re-exported after the exhibition IcHTAa all of which should be submitted to the Department of Finance, together with the shipping documents, prior to actual release from the Bureau of Customs. In this connection, please be advised that the internal revenue tax for which this Bureau is concerned with in the proposed importation is the 10% Value-Added Tax imposed under Section 107 of the National Internal Revenue Code of 1997. However, since under Section 105(i) of the Tariff and Customs Code, the Secretary of Finance is authorized to allow the entry of imported articles to be used exclusively for, among others, display in public expositions , such as the importation by foreign exhibitors in the forthcoming 9th International Defense Equipment Exhibition and Conference, without prior payment of the duty, tax or other charges upon compliance with certain conditions, this Office hereby confirms that the 10% VAT is included among the taxes which have been deferred or conditionally declared free by the Secretary of Finance and covered by the bond to be posted therefor . Please be guided accordingly. Very truly yours, (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group