BIR Ruling No. 282-2016

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

s Quezon City

Sec. 109((1)(T).1997 NIRC

RA 9295

RA 9337

BIR Ruling No. 385-2014

#282-2016

6m272016

3/F VIP Bldg.. 1 140 Roxas Blvd. cor. Nuestra. Sr. de Guia Narra Tanker Corporation

Ermita Manila

Gentlemen:

This refers to your letter dated April 28. 2016 requesting for a certificate of tax exemption

on the vessel importation of one (1) unit brand new Oil Tanker named: "MT SHUN YUAN DA 8.

TBR: NTC AGILA 1 from China pursuant to Sec. 4.109-1 B(1)(t) of the Tax Code of 1997. as

amended.

Documents submitted show that the importer, Narra Tanker Corporation (NTC) is a

domestic corporation organized and registered with the Securities and Exchange Commission

(SEC) under Company Registration No. Revenue (BIR) under Tax Identification No. It is registered with the Bureau of Internal It is duly registered with the

Maritime Industry Authority (MARINA) per Certificate of Accreditation No.

(2016) and valid until January 28. 2019. NTC is authorized to engage in domestic shipping and

inland water transport business. NTC's vessel to be imported is intended primarily to provide

transport/hauling service 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 April 5. 2016 pursuant to the MARINA endorsement

dated April. 18.2016. favorably endorsing the vessel importation as compliant with its regulations

under Republic Act (RA) No. 9295 and that it also conforms with the rules on mandatory vessel

retirement. Pursuant to RA 9295, Rule III, Section 3, the conditions for the availment of value-

added tax (VAT) exemption are as follows:

3.1 Said articles are not manufactured domestically in sufficient quantity of

comparable quality and at reasonable prices, to be determined by the MARINA:

3.2 Said articles are directly imported by a MARINA-registered domestic ship-

owner/operator: 3.3 Said articles are reasonably needed and will be used exclusively by the

registered domestic ship-owner/operator in its transport operations:

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herein below stated is the specification of the subject vessel:

Vessel Name : ExMT SHUN YUAN DA 8TBRNTCAGILA 1

Ship Builder FUJIAN YIHE SHIP BUILDING Date Keel Laid * 2013 Year Built March 18.2014 IMO No.

Serial No. Registration No Material of the Hull Call Sign Gross Tonnage Flag Length Breadth Depth Net Tonnage Steel (Double) Chinese 4.50 m V3UJ9 88.0 m 15.0 m 2.112.00 Tons 941.00 Tons

Dead Weight 3.355.00 Metric Tons Engine Screw Type Propeller Two (2) YANMAR Diesel 1,766.4 HP

In support of its request for exemption, NTC has submitted the following documents:

1 Articles of Incorporation and By-Laws of NTC

2 BIR Certificate of Registration of NTC 3 MARINA Accreditation Certificate No

4 MARINA Authority to acquire vessel thru importation dated April 5.2016:

S MARINA Endorsement for vessel as compliant to vessel importation and

mandatory requirement dated April 18.2016

6 Secretary Certificate of Thomas A. Tan as the authorized signatory to the

application: Memorandum of Agreement dated February 19. 2016:

8 Commercial Invoice No. 108-2016 dated April 8, 2016:

9 Tonnage Calculation;

I 10 Certificate of Ship's Minimum Crew Complement: Marine Load Line Certificate:

12 13 Certificate of Ship's Nationality; Principal Dimensions:

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

provides as follows:

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"Sec.109 Exempt Transactions.-Exempt Tramsactions.

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

inchuding engine. equipment and spare parts thereof for domestic or (T)' Sale. inportation or lease of passenger or cargo vessels and aircrafi. internutional transport operations.

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 exemptfrom VAT

xxxxxx XXX

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

program of MARINA.

has been issued by MARINA with the required authority to be imported. Hence. the importation It is noted that MT SHUN YUAN DA 8, TBR: NTC AGILA I is a brand new vessel and

of the said vessel by NTC is deemed compliant with the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA.

shall be exempt from VAT pursuant to Sec. 109(1)(T) of the 1 997 Tax Code, as amended. The VAT Accordingly, the importation by NTC of MT SHUN YUAN DA 8. TBR: NTC AGILA

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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.

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.

KIM S. JACINTO-HENARES

K-I-RFR \narra Commissioner of Internal Revenue 042364

JUN 2 & 2015