RR No. 15-2015 — Amends Sections 4.109-1(B)(1)(s), (t) and (u) of RR No. 16-2005, as amended, relative to sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations (Published in Manila Bulletin on December 29, 2015)

BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVISION

RECEIVED DEC 2 8 2015 7N"3: 6o pn7

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE ANGATPA PINAST

Quezon City

Date: December 28, 2015

REVENUE REGULATIONS NO. IC-20\5

SUBJECT : Amending Sections 4.109-1 (B)(1)(s), (t) and (u) of Revenue

Regulations (RR) No. 16-2005, as amended, Relative to Sale, importation or lease of passenger or cargo vessels and aircraft. including engine, equipment and spare parts thereof for domestic or internationai transport operations

TO All Internal Revenue Officers and Others Concerned

SEcTION 1. Scope. -- Pursuant to the provisions of Sections 109(T) and 244. in relation to Section 245 of the National Internal Revenue Code of 1997 (Tax Code), as amended, these Regulations are hereby promulgated to amend provisions of Revenue Regulations (RR) No. 16-2005, as amended.

SECTION 2. Amendment. -- Section 4.109-1 (B)(1) of RR 16-2005, as amended, is hereby further amended by revising Section 4.109-1 (B)(1)(s) and deleting Sections 4.109-1 (B)(1)(t) and (u) . Accordingly, Sections 4.109-1 (B)(1)(s), (t) and (u) of RR 16-2005, as amended shall now read as follows:

"SECTION 4.109-1. VAT-Exempt Transactions. -

(B) Exempt transactions. XXX

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

XXX

() The transport_of_passengers by international carriers_doing business in the Philippines shall.be exempt from value-added tax

(VAT) pursuant to Sections 109(1(S) of the NIRC. as amended by RA No. 10378. The transport of cargo by international carriers doing business_in. the .Philippines..shall..be..exempt..from VAT

pursuant to_Sections. 109(1)(E) of the NIRC, as arnended by RA No. 10378, as the same_is subject to Common_Carrier's Tax (Percentage Tax on International Carriers) under Section 118 of Sections 109(1)(S) and 109(1)(E) of the.NIRC, as amended, shall the .NIRc..as..amended...International.carriers..exempt .under not be allowed to register for VAT.purposes.

(t) Sale, importation.or lease of passenger or cargo vessels and aircraft, including engine_equipment and spare parts thereof for

domestic.or..internationaltransportoperations:Provided however,_that the exemption from VAT on_the importation and

subject to the reguirements on restriction on vessel importation and mandatory vessei retirement program of MARiNA. local_purchase of_.passenger _and/or cargo_.vessels_shall._be

Importation of fuel, goods and supplies by persons engaged in international shipping or air transport operations; Provided, that the said fuel, goods and supplies shall be used exclusively or

port in the Philippines directly to a foreign port, or vice versa. shall pertain to the transport of goods and/or passenger from a without docking or stopping at any uniess the docking or stopptr y other port in the Philippines y other Philippine port is for the purpose of unloadin originated from abroar engers and/or cargoes that passengers and/or cargoes bound for abroad; Provided. urther, that if any portion of such fuel, goods or supplies is used for purposes other than that

supplies shall be subject to twelve percent (12%) VAT starting mentioned in this paragraph, such portion of fuel, goods and February 1, 2006:

Services of banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries, such as money changers and pawnshops, subject to percentage tax under Secs. 121 and 122, respectively, of the Tax Code; and

w) Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding

paragraphs, the gross annual sales and/or receipts do not exceed the amount of One Million Nine Hundred Nineteen Thousand Five

NOIS TENAAINI HO nVAAS BOLSOOO CH 82 DA E O E F thereafter, the amount shall be adjusted to its present vatue using the Consumer Price index, as published by the NSO; Provided. regulations to be issued not later than March 31 of each year; For purposes of the threshold of P1,919,500.00, the husband and Hundred Pesos (P1,919,500.00); Provided, every three (3) years further, that such adjustment shall be published through revenue the wife shall be considered separate taxpayers. However, the aggregation rule for each taxpayer shall apply. For instance, if a professional, aside from the practice of his profession, also

derives revenue from other lines of business which are otherwise subject to VAT, the same shall be combined for purposes of determining whether the threshold has been exceeded. Thus, the VAT-exempt saies shall not be included in determining the threshold."

SECTION 3. Repealing Clause. --- Any rules and regulations or parts thereof inconsistent with the provisions of these Regulations are hereby repealed, amended or modified accordingly.

SECTION 4. Effectivity. ---The provisions of these Regulations shall take effect after fifteen (15) days following publication in any newspaper of general circulation.

M

CesArV.PUrisima Secretary of Finance 029126

Recommending Approvat:

KIM S. JACINTO-HENARES Commissioner'of internal Revenue 037530 BUREAU OF INTERNAL REVENUE RECORDS MGT DIVISION

RECEIVED DEC 2 8 2015 q3 C: 00 prv