BIR Ruling No. 280-2022

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Ouezon City

Section 109 (1) (T) of the Tax Code of 1997, as amended BIR Ruling No. VAT-137-21

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

Attention: Vice President -- Atmita D. Barug Projects

Gentiemen:

importation of one (1) unit Dumb Barge, "M/V Ever Bright" from the registered owner, Pioneer Mariner SDN BHD of Malaysia. This refers to your request for an exemption from value-added tax (VAT) on the

('MAMSAR"), with Taxpayer Identification Number (TIN) Documents submitted disclos& that MAMSAR Construction and Industrial Corporation is a domestic

doing and performing of any and atl acts and things necesstiry, proper or convenient for and contracts or assignment of contracts therefor, or in relation thereto, or connected therewith and is duiy accredited by the Maritime Industry Authority (MARINA) and is authorized to engage 2022 which is valid until January 27, 2025; and that it is currently importing one (1) unit vessel named "M/V Ever Bright" from Pioneer Mariner SDN. BHD of Malaysia, particularly described as follows: engaging in any work upon buildings, roads, highways, manufacturing plants, bridges airfields, piers, docks, mines, shafts. waterworks, railroads, railway structures, all iron steel to manufacture and furnish building inaterials and supplies connected therewith: and doing of in domestic shipping business per MARINA Certification No businesses including the construction, enlarging, repairing, removing, deveioping, or otherwise wood, masonry and earth construction, and to make, executo, bid for and take or receive any any and all other business and contracting incidental thereto or connected therewith, and the incidental to the furtherance and /or iinplementation of the purpose therein mentioned."; that it corporation organized under the laws of the Republic of the Philippines; that it is,registered with the Securities and Exchange Commission (SEC) ur:der Company Registration No that its primary purpose is "[t]o engage in general construction and other allied ' dated January 28.

Length Registered Material/Type Breadth Registered Vessel Name Port of Registry Call Sign Official No. Flag Ni 15.25 Meters "M/V Ever Bright" Malaysia Kota Kinabalu 52.67 Meters Dumb Barge

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NRT Depth Registered Freeboard Class Year Built Ply Limit GRT Sabah, Sarawak, and Labuan 231 KM 3.66 Meters 749 MM 117 1990

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.

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

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 Transactions.

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(B) Exempt Transactions.

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

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(t) Sale, importation 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 from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject to the

vessel retirement program of Maritime Industry Authority requirements on restriction on vessel importation and mandatory (MARINA); "

Based on the above-cited piovisions, the importation of passenger or cargo vessel destined for domestic transport operations shall be exempt from VAT. Hence, the importation by MAMSAR of one (l) unit vesselnamed "M/V Ever Bright" shall be exempt from VAT pursuant to Section 109 (1) (T) of the Tax Code of 1997, as amended. However, the VAT

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exemption shall be subject to the requirements on restriction on vessel importation and mandatory vessel retirement progra of MARINA.

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

considered null and void.

Very truly yours,.

A&oNM

Com missionenof Intermal Reven ue CAESAR R. DULAY 051740 K-1

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