BIR Ruling No. 301-2022

BUREAUOF INTERNAL REVENUE REPUFLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Quezon City

Section 109T),NIRC VAT- BIR RULING NO.679-19 RR No. 15-2015 301-2022

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

Attention: :Ms. Narissa Arellano Finance Managex

Gentlemen:

importation of one (1) Unit 2010 built 400 GT LCT Type Car/Ferry passenger vessel named Nam Shin An Nong Hyup No. 6, pursuant to Section 109 (1)(T) of the National Internal Revenue Code (NIRC) of 1997,as amiended. Shipping Lines, Inc. for a Certificate of Value-Added Tax VAT Exemption on its This refers to your letter dated April 20, 2022, requesting on behalf of Montenegro

Montenegro Shipping Lines, Inc. is currently importing one (1) Unit 2010 built 400 GT LCT accredited by the Maritime Industry Authority (MARINA) to engage in domestic shipping business per MARINA Certification dated July 13,2020 valid until July 21,2023; that Identification No. and Exchange Commission (SEC) uader Company Registration No. Type Car/Ferry passenger vessel which is particularly describe 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 Engine Vessel's Name Gross Tonnage Dimension Depth Breadth Kind of Vessel Flag Year Built Mitsubishi S6R2 1,032PS X 1,406 RPM X 2 Sets LCT Type Car/Ferry LOA 63.10 m 2.85 m Nam Shin An Nong Hyup No. 2010 400 tons 11.20m (Max 13.0 m) Korea

Shipping Lines, Inc., the subject passenger vessel cannot be manufactured domestically in comparable quality, technology and at reasonable price; and that it is reasonably needed and will be used exclusively by the compary operations. 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 dated April 20, 2022 executed by Narissa Arellano, Finance Manager of Montenegro

Montenegro Shipping Lines, Inc. Page 2 of 3 VAT-351- JUN 2 2 222

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

3 Certified true copy of the Certificate of Registration with MARINA; Certified true copy of the SEC Certificate of Registration, Articles of BIR Certcate of Pegistration Incorporation and By-Laws;

5 A Memorandum of Agreement dated May 6,2022,executed by and Certified true copy of the MARINA Authority to Import

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.

XXX XXX XX

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

XX XXX CX

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

vessel destined for domestic transport operations shall be exempt from VAT. In relation by RR No. 15-2015, witich impiements the above-quoted provision, provides: thereto, Section 4.109-1B1t of the Revenue Regulations (RR) No.16-2005, as amended Based on the above-cited provision, the importation, among others, of a passenger

"SECTION 4.109-1. VAT-Exempt Transactions.

XXX XXX XX (B) Exempt transactions.

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

XXX XXX XX

of passenger and/or cargo vessels shall bei subject to the that the exemption from VAT on the importation amd local purchase aircrafi, 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

1 Renumbered by Republic Act No.10378

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vessel retirement program of MARINA. " requirements on resiriction on vessel importation and mandatory

approval issued by MARINA for the importation of the subject vessel. (BIR Ruling No. 679- however, shall be subject to the strict compliance of the conditions contained in the letter of 19 datedNovember 13, 2019 Shipping Lines, Inc. of Nam Shin An Nong Hyup No.6shall be exempt from VAT pursuant to Section 109 (1)(T of the NIRC of 1997, as amended. The VAT exemption, Car/Ferry passenger vessel and has been issued by MARINA with the required authority to be deemed compliant with the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA. Accordingly, the importation by Montenegro imported. Hence, the importation of the said vessel by Montenegro Shipping Lines, Inc. is It is noted that Nam Shin An Nong Hyup No. 6 is a 2010 built 400 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,

MRso Very truly yours.

K-1-JAC Commissioner of Internal Reyenue CAESAR R. DULAY 051915 G