BIR Ruling No. 302-2022

BUREAU OF INTERNAL REVENUE REPUBLICOFTHE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

BIR RULING NO. 679-19 VAT- Section 1091T),NIRC; RR No. 15-2015

JUN 2 2 2022

Montenegro Corporate Center, along Diversion Road, Bolbok, Batangas City, 4200 MONTENEGRO SHIPPING LINES,INC.

Attention:Ms. Narissa Arellano Finance Manager

Gentlemen:

This refers to your letter dated April 20, 2022, requesting on behalf of Montenegro

Nam Shin An Nong Hyup No. 5, pursuant to Section 109 (1)(T) of the National Internal Shipping Lines, Inc. for a Certificate of Value-Added Tax VAT Exemption on its importation of one (l) Unit 2015 built 469 GT LCT Type Car/Ferry passenger vessel named Revenue CodeNIRCof 1997,as amended

Montenegro Shipping Lines, Inc. is currently importing one ( 1) Unit 2015 built 469 GT LCT and Exchange Commission (SEC under Company Registration No. business per MARINA Certification dated July 13,2020 alid until July 21,2023;that Identification No. accredited by the Maritime Industry Authority (MARINA) to engage indomestic shipping Type Car/Ferry passenger vessel which is particularly described as follows: Documents submitted show that Montenegro Shipping Lines, Inc., with Tax is a domestic corporation registered with the Securities that it is duly

Main Enginc Vessel's Name Gross Tonnage Dimension Depth Flag Kind of Vessel Breadth Year Built 469 tons Yanmar 12AYM-WST 1400 PS X 1900 RPM X 2 Sets Nam Shin An Nong Hyup No.5 Korea LCT Type Car/Ferry 2015 3.0 m 12.0m (Max 13.5 m) LOA.67.47 m

Shipping Lines, Inc., the subject passenger vessel cannot b manufactured domestically in will be used exclusively by the company operations. dated April 20. 2022 executed by Narissa Arellano, Finaice Manager of Montenegro comparable quality, technology and ai reasonable price; and that it is reasonably needed and that MARINA has approved the importation of the above passenger vessel in its letter dated April 12, 2022 addressed to Montenegro Shipping Lines, Inc.; that per Sworn Statement

O

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the following documents: In support of its request for exemption. Montenegro Shipping Lines,Inc. submitted

1. Certified true copy of the SEC Certificate of Registration, Articles of 2 BIR Certificate of Registration; Incorporation and By-Laws;

3 Certified true copy of the Certificate of Registration with MARINA; 4 Certified true copy of the MARINA Authority to Import 5 Memorandum of Agreement dated May 6, 2022, executed by and

6. Sworn Statement dated April 20, 2022 between Hong In Marine Co. Ltd. and Montenegro Shipping Lines, Inc. and

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

"Sec. 109.Exempt Transactions. -

XX XXX 1XXX

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

XXX XXX XXX

domestic or international transport operations," ( aircrafi, including engine, equipment and spare parts thereof for Sale. importation or lease of passenger or cargo vessels and

by RR No.15-2015.which implemerts the above-quoted provision, provides vessel destined for domestic transport operations shall be lexempt from VAT. In relation thereto, Section 4.109-1(B1)t) of the Revenue Regulations (RRNo.16-2005,as amended Based on the above-cited provision, the importation, among others, of a passenger

"SECTION4.109-1. VAT-Exempt Transactions.

(B) Exempt transactions. XXX XXX XXX a

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

XXX XXX XXX

of passenger and/or cargo vessels shall be subject to the aircrafi, including engine. equipment and spare parts thereof for that the exemption from VAT on the importation and local purchase domestic or international transport operations; Provided, however, ( Sale, importation or lease of passengerior cargo vessels and

1 Renumbered by Republic Act No. 10378

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requirements on restriction on vessel importaiion and mandatory vessel retirement program of MARINA. "

however. shall be subject to the strict compliance of the conditions contained in the letter of approval issued by MARINA for the inportation of the subject vessel.(BIR Ruling No.679 19 dated November 13, 2019) vessel retirement program of MARINA. Accordingly, the importation by Montenegro Shipping Lines,Inc.of Nam Shinr An Nong Hyup No.5shall be exempt from VAT pursuant to Section 109T of the NIRC of 1997, as amended. The VAT exemption imported. Hence, the importation of the said vessel by Montenegro Shipping Lines, Inc. is deemed compliant with the requirements on restriction on vessel importation and mandatory Car/Ferry passenger vessel and has been issued by MARINA with the required authority to be It is noted that "Nam Shin An Nong Hyup No. 5 is a 2015 built 469 GT LCT Type

if 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

Very truly yours.

K-1-JAC Commissioner of Internal Revenue NUaw CAESAR R.DULAY 051914