BIR Ruling No. 496-2017

REPUBLIC OF THE PHILIPPINES

BUREAU (,F INTERNAL REVENUE DEPAR"MENT OF FINANCE

Quezon City

pp

Section 109 (1)(T). NIRC: BIR Kuling No. 101-17 RR No. 15-2015:

496-2017 10-24-2017

DACANAY MAGRACIA LAW OFFICES Unit 408 Puso ng Maynila Building United Nations Avenue corner Manila 1000 1046 A. Mabini Street, Ermita.

Attention : Atty. Jabeth Sena Jepath A. Dacanay

Partner

Gentiemen:

This refers to your letter dated August 23. 2017. requesting on behalf of Magic Leaf Marine Logistics Corporation. with business address at National Road, AFAB, Mariveles. Bataan, for a Certificate of Value-Added Tax (VAT) Exemption on its importation of a passenger ship- pursuant to Section 109 (1)(T) of the National Internal Revenue Codc (NIRC) of 1997. as amended.

Documents submitted show that Magic Leaf Marine Logistics Corporation. with I'ax

and Exchange Commission (SEC) under Company Registration No. Identification No. is a domestic corporation registered with the Securities that it is duly accredited by the Maritime Industry Authority (MARINA) to engage in domestic shipping business per MARINA Certification dated October 24. 2016 valid until October 23 2019; and that Magic Leaf Marine Logisties Corporation is currently importing one (1) passenger ship which is particularly described as foilows:

Name of ship Former Owner Converted by/ Modified by/ Rebuilt by Breadth (Meter) Former Ship's Name Registered Length (Meter) Gross Tonnage Depth (Meter) Buitder TSUNEISHI RINGYO KENSETSUCO.. LTD. NORTHERN LIGHT CO.. LTD. (NLCL) 29.97 2.65 8.30 MV XGC EXPRESS SUZUKASE N.A Net Tonnage Hull Material 63.00 AluMInum ALLOy 210.00 Deadweight N.A. Official Number Type of Ship Trading Area Number of Screw Number of Engine P{acc Buil Place Converted Type of Stem BULBOUS JAPAN N.A PASSENGER Coastwise IMO Number Year Built Number of Masts Number of Decks Type of Stem Year Converted SQUARE NA 2006 N.A

Magic Leaf Marine Logistics Corporation/MV ISLAND EXPRESS (XCG Express) A450-2017 :0-24--0 :7

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Engine Make MTU MTU Kw 1.319.9 1.319.91 Serial Number Number of Cy(inder 2S

February 14, 2017 addressed to Magic Leaf Marine Logistics Corporation: and that per Sworn Statement dated Scptember 28. 2017 executed by Manuel Carlos I.. liagan. Jr.. that MARINA has approved the importation of the above Passenger Ship in its letter dated manufactured domestically in sufficient quantity. of comparable quality and reasonable price. President of Magic Leaf Marine Logistics Corporation. the subiect vessel cannot be

has submitted the following documents: In support of its request for exemption, Magic Leaf Marine Logistics Corporation

l. Certified true copies of the SEC Certificate of Registration. Articles of 2 BIR Certificate of Registration: Incorporation and By-Laws:

3 Certificate of Registration with MARINA: 4. Certified true copy of the MARINA Authority to Import: and 5. Sworn Statement dated September 28. 2017.

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

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

followving transuctions shall be exempt from the value-added tux. Subject to the provisions of Suhsection (2) hereof. the

(T)) Sale, importation or lease of passenger or cargo vessels imd domestic or international trunsport operations. aircraft. including engine. equipment and spare parts thereof for

by RR No. 15-2015, which implements the above-quoted provision. provides: vessel destined for domestic transport operations shall be exempt from VAT. In retation thereto. Section 4.109-1 (B)(1)(t) of the Revenue Regulations (RR) No. 16-2005. as amended Based on the above-cited provision, the importation. among others. of a passenger

"SECTION 4.109-I. VAT-Exempt Trunsuctions.

(B) Exempt trunsactions. XXX XX X.XX

follow'ing transactions shall he exempt from VAT: Subject to the provisions of Subsection (2) hereof: the

XXX X.K.X X.X

i Renumbered by Republic Act No. 10378

Magic Leaf Marine Logistics Corporation/MV ISLAND EXPRESS (XCG Express) --.96-- 2017 10-24-20 :7

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Sale. importotion or leuse of passenget or cargo vessels und uircrufi. including engine, equipment und! spire purts thereof for domestic or intermtionul transport operutions: Provided. however that the exemption from VAT on the importatic n and focal parchase of passenger und'or curgo vessels shall he suhjecr to the requirements on restriction on vessel imiortation und mamdator vessel retirement progrum of MLARINA. "

it is noted that M/V XGC Express is a brand new vessel and has been issued by MARINA with the required authority to be imported. Hence. tie importation ot the said vessel by Magic Leaf Marine Logistics Corporation is deemed conpliant with the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA. Accordingly. thc importation by Magic Leat Marine Logisties Corporation Southwest Premiere Ferries, Inc. ot' M/V XGC Express shall be exempt fron: VA't' pursuant to Section 109 (1)(1') of the NIRC of 1997, as amended. The VA1 exerption. hovcver. shall be subject to the strict compliance of the conditions contained in the letre: of approva! issued by MARINA for the importation of the subject vessel. (BIR Ruling Vo. 101-1 " deted March 3. 201 ")

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

V'e'ry truly you's.

Aaw,ew 1va

Commissioner of Internal Revenue CAESAR R. DULAY W 010458 K-I -JAC