BIR Ruling No. 291-2016

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

1 BUREAU OF INTERNAL REVENUE

T

Quezon City

Section 109(1TNIRC

Revenue Regulations No. 15-2015

BIR Ruling No. 092-2016

#291-2016 6272016

SAN ROOUE SHIPPING, INC Bonifacio Global City, Taguig Unit 2A02-04 Quadrant 1

Attention: Aristotle Thomas U. Andrey Officer-In-Charge

Gentlemen:

"VNG VIII", "VNG IX" and "VNG X, pursuant to Section 109(1)(T) of the National Roque Shipping, Inc., for a Certificate of Value-Added Tax (VAT) Exemption on its importation of three (3) brand new units of Landing Craft Transports (LCTs) named Internal Revenue Code (NIRC) of 1997, as amended. This refers to your letter dated January 29, 2015, requesting on behalf of San

Identification No. Documents submitted show that San Roque Shipping, Inc., with Tax is a domestic corporation registered with the Securities and Exchange Commission (SEC) under Company Registration No.

to engage in domestic shipping business per MARINA Certification No. currently importing three (3) brand new units of cargo vessels, for a purchase price of of the transportation and insurance costs of dated July 16, 2013 valid until July 15, 2016; and that San Roque Shipping, Inc. is that it is duly accredited by the Maritime Industry Authority (MARINA) (USD each, inclusive US Dollars

(USE ). The three (3) newly acquired cargo vessels are more particularly described as follows:

Vessels Name "VNG VIII"VNG IXandVNG X

LengthOverall Main Dimensions Length. betweenI 75.5m 79.5m

BreadthHull perpendiculars Combing Ramp 18.0m 1.8m 10.5m x 7.5m

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Depth to Deck Design Draft 4.8m 3.6m

Navigation Area Coastal

Main Engine Deadweight KTA19-M 447Kwx2/1800RMP About 3000MT

Design Speed Name of Seller Built Year Port of Registry About 8.5 Knots Panama Hong Kong Orient Wealth International Trading Ltd. 2015

vessels in its letter dated December 18.2014 addressed to San Roque Shipping, Inc. and that MARINA has approved the importation of the three (3) brand new cargo

submitted the following documents: In support of its request for exemption, San Roque Shipping, Inc. has

Certified true copies of the SEC Certificate of Registration, Articles of

Incorporation and By-Laws; 2. Certified true copy of the MARINA Authority to Import;

3 Certified true copies of the Commercial Invoices:

4 Certified true copies of Deeds of Sale

S Certificate of Registration with MARINA 6.BIR Certificate of Registration; and 7. Other pertinent documents.

In reply. please be informed that Section 109(1)(T) of the NIRC of 1997. as

amended, provides as follows:

"Sec. 109 Exempt Transactions. -Exempt Transactions.

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

(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. "

Based on the above-cited provision, the importation, among others, of a cargo

vessel destined for domestic transport operations shall be exempt from VAT. In relation

thereto, Section 4.109-1 (B)(1)(t) of Revenue Regulations (RR) No. 16-2005. as

amended by RR No. 15-2015, which implements the above-quoted provision, provides:

SECTION 4.109-1. VAT-Exempt Transactions.

XXX XXX XXX

(B) Exempt transactions.

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

XXXXXX XXX

vessels and aircraft,including engine, eguipment and spare ( Sale, importation or lease of passenger or cargo

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 requirements on

retirement program of MARINA. " restriction on vessel importation and mandatory vessel

It is noted that the LCTsVNG VIIIVNG IXandVNG Xare all brand

imported. Hence, the importation of the said vessels by San Roque Shipping, Inc. is deemed compliant with the requirements on restriction on vessel importation and new vessels and have been issued by MARINA with the required authority to be conditions contained in the letter of approval issued by MARINA for the importation mandatory vessel retirement program of MARINA. Accordingly, the importation by San Roque Shipping,Inc.of the LCTsVNG VIIIVNG IXandVNG Xshall be exempt from VAT pursuant to Section 109(1)(T) of the NIRC of 1997, as amended. of the above-described vessels. The VAT exemption. however, shall be subject to the strict compliance of the

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

ruling shall be considered null and void.

Very truly yours,

KIM S.JACINTO-HENARES Commissioner of Internal Revenue

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