BIR Ruling No. 476-2019

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE E BUREAU OF INTERNAL REVENUE

Quezon City

RA No. 10349:

BIR Ruling No. 060-17

1o7-209 AUG 3 0 2019

TRITGN COMMUNICATIONS CORPORATION Unit 2706 Antel Giobal Corporate Center. Julia Vargas Ave., Ortigas Center. Pasig City

Attention : Mr. Darwin M. Rivera

President

Gentlernen:

This refers to your letter Jated July. 6, 2017 requesting, on behalf of Triton Communications Corporation, for iax exemption on the importation of equipment intended for the Armed Forces of the Philippines.

Documents submitted show that Triton Communications Corporation (TIN:

Commission (SEC) with SEC Certificate of Registration No. is a domestic corporation duly registered with the Securities and`Exchange O December 14, 2015, Triton Communieations Corporation was issued a Notice of Award by the Secretary of the Department of National Defense (DND); and to give effect to said Notice of Award, a Contract Agreement dated March 1, 2016 was executed by and between the DND and Triton Communications Corpcration whereby the latter agreed to supply and deiiver Marine Forces Imagery and Targeving Support Systems (MITSS) for the Philippine Marine Corps (PMC) with an Approved Budget for the Contract (ABC) amounting to

Pesos (Php '. Philippine Currency.

Based on the foregoing, you now request for confirmation of your. understanding that while the importation of the equipment is subject to VAT, the subsequent sale of the aforementioned equipment by Triton Communications Corporation to the PMC as part of the Armed Forces of the Philippines Modernization Prograin which will be used directly and exclusively for the programs, underiakings, and any other activities for the upgrading of the capability of the'PMC, shall be exempt from value-added tax (VAT) pursuant to Section 10 of Republic Act (RA) No. 1:349.

In reply, please be informed th.a: Section 10 of RA 10349, amending RA No. 7898. provides:

Act which shall now become the new Sections 17, 18 and 19 respectively, "SEC. 10. Insert three (3) sections after Section 16 of the same

which shall read as:

Customs Duries. ammunitions to the + FP, nhich are directly and exclusively SEC. 17. -- The sale of weapons, equipment and Exemption from Value-Added Tax and

used for its projects, indertakings, activities and programs under the Revised AFF Modernization Act, shall be exempt from the value-added tax; Provided, That the importation of

Triton Communications Corporation Page 2 ot`2 C476-201E AUG 3 1 2E:

the same by the AFP shall likewise be exempt from the value. added tax and customs duties.

XXX XXX XXX

individual and/or organizations and sub-organizations within the AFP. " (BIR Ruling No. by the AFP is also exempt from VAT. In relation thereto, the Department of National Guidelines, Rules and Regnilations of the Revised Armed Forces of the Philippines 060-17 dated February 17, 2017) Defense (DND) issued the Department Circular No. 3 (Issuing the Implementing Modernization Act) dated April 11. 2013 which, among others, defined the term to the Armed Forces of the Philippines (AFP), which are directly and exclusively used for its projects, undertakings,"aetivities and programs under the: Revised AFP Modernization Act, shall be exempt from VAT. Moreover, the importation of the same 'equipment" as referring to "all non-expendable items needed to outfit or equip amy Under Section 10 of R A 10349, the sale of weapons, equipment and ammunitions

its projects, undertakings, activities and programs under the Revised AFP Modernization out by Triton Communications Corpcration. importation by Triton Communicaticns Corporation of the subject equipment, and second is the subsequent sale thereof by Triton Communications Corporation to the AFP. Act, is exempt from VAT, the importation of the same may only be exempt from VAT if the importation is done by the AFP. In the instant case, the importation shall be carried While the sale of equipment to the AFP, which shall be directiy and exclusively used for It is noted that there are two (2) transactions involved in this case. First is the

Communications Corporation of the subject equipment is subject to VAT. However, the subsequent sale by Triton Communications Corporation to the AFP of the Marine Forces Imagery and Targeting Support Systems (MITsS), which will be used directly and dated February 17, 2017 exclusively by the AFP for its projects, undertakings, activities and programs under the Revised AFP Modernization Act, shall be exempt from VAT. (BIR Ruling No. 060-17 Applying the foregoing, this Office rules that the importation by Triton

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

Very truly yours. ioOMy

Commissioner of Internal Revenue CAESAR R. DULAY

028031

K-1-JAC

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