BIR Ruling No. 282-2022

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Section 109 (1)(T) of the Tax

VAT-282-2022 BIR Ruling No. VAT-137-21 Code of 1997, as amended J LEL P

MAMSAR CONSTRUCTION AND INDUSTRIAL CORPORATION Macapagal Avenue,Tubod Iligan City, 9200

Attention: Almita D.Barug Vice President -Projects

Gentlemen:

importation of one )unit 2008-buili,327 GTTug Boat,M/V Classic 1to be named M/V This refers to your request for an exemption from value-added tax (VAT) on the

Manuel 88') from the registered owner, Pioneer Mariner SDN BHD of Malaysia.

MAMSAR),with Taxpayer Identification Number (TIN corporation organized under the laws of the Republic of the Philippines; that it is registered with the Securities and Exchange Commission (SEC under Company Registration No. businesses including the construction, enlarging, repairing,removing, developing, or otherwise Documents submitted disclose that MAMSAR Construction and Industrial Corporation that its primary purpose is [t]o engage in general construction and other allied is a domestic

engaging in any work upon buildings, roads, highways manufacturing plants, bridges. airfields, piers, docks, mines, shafts, waterworks, railroads, railway structures, all iron steel, wood, masonry and earth constructien, and to make, execute, bid for and take or receive any

and to manufacture and furnish building materials and supplies connected therewith: and doing contracts or assignment of contracts therefore, or in relation thereto, or connected therewith doing and performing of any and all acts and things necessary, proper or convenient for and of any and all other business and contracting incidental therero or connected therewith, and the incidental to the furtherance and /or implementation of the purpose therein mentioned."; that it

in domestic shipping business per MARINA Certification No. January 28, 2022 which is valid until January 27, 2025; and that it is currently importing one is duly accredited by the Maritime Industry Authority (MARINA) and is authorized to engage dated

1unit vessel namedM/V Classic1(to be namedM/V Manuel 88'from Pioneer Mariner SDN BHD of Malaysia, particularly described as follows:

Specification Vessel Vessel Name namedM/V Manuel 88 M/VClassic 1to be

IMO Number Port of registry Vessel Type Flag Malaysia Kuching Tug Boat

VAT (n 2 ?2 Length Registered Breadth Registered Previous Owner Gross Tonnage Gen Set Depth Registered Net Tonnage Hull material Place of Building/Shipyard Classification Year Built Main Engine MTK3L 759 KW/ 1406 Sibu, Sarawak Malaysia RPM Pioneer Mariner SDN BHD 31.00 Meters 2 x Mitsubishi S6R2 2 x 80 KW Each 3/50/415 27.989 Meters 326 9 Steel Bureau Veritas (BV) 2008 4.30 Meters

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

"SEC. 109. Exempt Transactions.

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

XXX XXX XXX

(T) Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operation3:

In relation thereto, Section 4.109-1 (B) (1) (t) of Revenue Regulations (RR) No. 16-2005, as amended, states that:

"SECTION 4.109-1. VAT-Exempt Transacti3ns.

XXX XXX XXX

(B) Exempt Transactions.

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

XXX XXX XXX

(t) Sale, importatior:-or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations; Provided, however, that the exemption fro.n VAT on the importation and local purchase of passenger and/o: cargo vessels shail be subject to the requirements on restriction on vessel importation and mandatory

Y

t

(MARINA); " vessel retirementprogram of Maritime Industry Authority

Based on the above-cited provisions, the importation of passenger or cargo vessel destined for domestic transport operations shall be exempt from VAT. Hence, the importation by MAMSAR of one (1) unit vessel named "M/V Classic 1" (to be named "M/V Manuel 88') shall be exempt from VAT pursuant to Section 109 (1) (T) of the Tax Code of 1997, as amended. However, the VAT exemption shall be subject to t'he requirements on restriction on Vessel importation and mandatory vessel retirement program of MARINA.:

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

Yery truly yours.

3oM

CAESAR R. DULAY Commissioner of Internal Revenue

051741

K-1

: Subject to presentation of the Authority tc Import issued by the MARINA