BIR Ruling No. 268-2017

E BUREAU OF INTERNALREVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

Sec.109(1(T),1997 NIRC

5/F VIP Bldg., 1i40 Roxas Blvd. cor. Nuestra Sra. de Guia St. Brgy.667 Zone 072,Ermita,Manila Balyena Tanker Corporation BIR Ruling No.092-2016 #268-2017 6-5-2017

Gentlemen: Attention : Mr. Thomas A. Tan President

exemption on the vessel importation of one (1) unit newly-built LPG Carrier Vessel named "BTC BALYENA" from Kegoya, Japan pursuant to Sec. 109(1)(T) of the Tax Code of 1997. as amended. This refers to your letter dated September 8, 2016 requesting for a certificate of tax

clients which purpose is covered by MARINA's authority to acquire subject vessel thru BTC's vessel to be imported is primarily intended to provide transport/hauling services for Petron in its distribution of LPG products throughout the country and to other prospective 2016, favorably endorsing the vessel importation as compliant with its regulation. domestic corporation organized and registered with the Securities and Exchange Commission Internal Revenue (BIR) under Tax Identification No. with the Maritime Industry Authority (MARINA) per Certificate of Accreditation No. importation dated August 11, 2016 pursuant to the MARINA endorsement dated September 2. (SEC) under Company Registration No. Documents submitted show that the importer, Balyena Tanker Corporation (BTC) is a valid until August 4, 2019, to engage in domestic shipping business. It is registered with the Bureau of It is duly registered

Below is the specification of the subiect vessel:

Date Kecel Laying. Hull No. Nationality Shipbuilder IMO No. Gross Tonnage Kind of Ship Vessel Name Flag Year Built : : : : : : : BTC Balyena To be registered in the Philippines 3.404 Tons 2016 LPG Carrier Philippines KEGOYA DOCK CO.,LTD December 13.2015

the detailed dimension of the aforesaid vessel. viz:

Length 89.96 m

#268-2017 6-5-2017

Page 2 of 3 Balyena Tanker Corporation

Estimated Speed Engine Make/Type Breadth Depth B.H.P No. of shaft ** :. .. .. 7.20 m 2,200 kw 13.5 kwts. One(1) 15.50 m One (1) Diesel Engine AKASAKAGUEC33 LS II

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.

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

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

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

2005. 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-

"SECTION 4.109-1. VAT-Exempt Transactions.

XXX XXX XXX

(B) Exempt transactions.

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

domestic or international transport operations: Provided. aircraft, including engine, equipment and spare parts thereof for however, that the exemption from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subiect to the reguirements on restriction on vessel importation and mandatory vessel retirement program of MARINA. t Sale, importation or lease of passenger or cargo vessels and XXX XXX xxx

with the required authority to be imported. Hence. the importation of the said vessel by BTC is deemed compliant with the requirements on restriction on vessei importation and mandatory vessel retirement program of MARIN It is noted that BTC BALYENA is a brand newvessel and has been issued by MARINA

1 Renumbered by Republic Act No. 10378

#2682017 6m5on2017

Balyena Tanker Corporation Page 3 of 3

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

if upon investigation, it will be discloscd 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.

Very truly yours. c

K-1-RFR balyena Commissioner of Internal Revenue CAESAR R.DULAY 006935