BIR Ruling No. 425-2016

REPUBLICOF THE PHILIPPINES

1 BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

BIR Ruling No. 092-2016 Sec.109(1)(T),1997 NIRC

425-2016 12-8-2016

3/F VIP Bldg., 1140 Roxas Blvd. cor. Nuestra Sra. de Guia St. Brgy.667 Zone 072, Ermita, Manila Molave Tanker Corporation

Attention : Mr. Thomas A. Tan President

Gentlemen:

on the vessel importation of one (1) unit brand new Steel Petroleum Product Tanker named: "MK JUPITER", TBN:"MTC GUIJO from China pursuant to Sec. 109(1)(T) of the Tax Code of 1997, as amended. This refers to your fetter dated July 29, 2016 requesting for a certificate of tax exemption

services for Petron in its distribution of petroleum products throughout the country and to other prospective clients which purpose is covered by MARINA's authority to acquire subject vessel thru importation dated July 7, 2016 pursuant to the MARINA endorsement dated July 22, 2016, domestic corporation organized and registered with the Securities and Exchange Commission (2016) and valid until January 28, 2019. MTC is authorized to engage in the business of inland water transport. MTC's vessel to be imported is primarily intended to provide transport/hauling favorab!y endorsing the vessel importation as compliant with its regulations under Republic Act (SEC) under Company Registration No. Revenue (BIR) under Tax Identification No. Maritime Industry Authority (MARINA) per Certificate of Accreditation No. (RA) No.9295. Documents submitted show that the importer, Molave Tanker Corporation (MTC) is a It is registered with the Bureau of Internal It is duly registered with the

Below is the specification of the subject vessel:

IMO No. Call Sign Flag Ship Builder Keel Laying Vessel Name Launching Year Buiit Singapore FUJIAN MA WEI SHIP BUILDING LTD. Ex: "MK JUPITER", TBN: "MTC GUIJO

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Official No. Class of Vessel Construction of Vessel : Hull No. Double Hull (Marpol) ABS

the detailed dimension of the aforesaid vessel, viz:

Gross Tonnage Net Tonnage Length Breadth Depth Dead Weight Tonnage Estimated Speed Engine 91.20 m 12.00 knots 15.22 m 7.30 m 2,987.00 Tons 3,995.00 Tons Two (2) DAIHATSU Diesel 4 S.C.S.A. 1,135.00 Tons

provides as follows: In reply, please be informed that Section 109(1)(T) of the 1997 Tax Code, as amended.

"Sec. 109 Exempt Transactions . - Exempt Transactions.-

(l) Subject to the provisions of Subsection (2) hereof. the following transactions shall be exempt from the value-added tax.

including engine, equipment and spare parts thereof for domestic or internationat transport operations. ' (T)' Sale, importation or lease of passenger or cargo vessels and aircraft.

intended to provide transport/hauling services for Petron in its distribution of petroleum products throughout the Philippines shall be exempt from VAT. Based on the above-cited provision, the importation, among others, of a cargo vessel

as amended by RR No. 15-2015, which implements the above-quoted provision, provides: In relation thereto, Section 4.109-1 (B)(1)(t) of Revenue Regulations (RR) No. 16-2005.

"SECTION 4.109-1. VAT-Exempt Transactions.

XXX xxx xxx

(B) Exempt transactions.

(1)Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from VAT:

XXX XXX XXX

1 Renumbered by Republic Act No.10378

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(t)Sale, importation or lease of passenger or cargo vessels and domestic or international transport operations; Provided, however. that the exemption from VAT on the importation and local purchase of aircrafi, including engine, equipment and spare parts thereof for passenger and/or cargo vessels shall be subject to the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA."

issued by MARINA with the required authority to be imported. Hence, the importation of the said vessel by MTC is deemed compliant with the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA. It is noted that MK JUPITER, TBN: MTC GUIJO is a brand new vessel and has been

exemption, however, shall be subject to the strict compliance of the conditions contained in the exempt from VAT pursuant to Section 109(1)(T) of the Tax Code of 1997, as amended. The VAT letter of approval issued by MARINA for the importation of the above-described vessel. Accordingly, the importation by MTC of MK JUPITER, TBN: MTC GUIJO shall be

upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented. However, if

Very truly yours.

1aanve

K-1-RFR imolave2 Commissioner of Internal Revenue CAESAR R. DULAY 002491