|
THE
Bureau of Internal Revenue (BIR) said it will issue a
circular clarifying how airlines, including freight
forwarders, should pay their taxes, in a move to correct
misconceptions on the logistics industry’s documentation
and payment procedures.
“We are
not changing the rules, we are just issuing a
clarificatory statement just like we did on the shipping
lines some months ago,” BIR Commissioner Lilian Hefti
said.
She
explained the BIR is trying to limit gray areas and
remove ambiguous provisions that may cause loopholes for
the taxpayers. Hefti said the BIR statement may be
released anytime this month.
In April
the bureau issued a 15-page memorandum clarifying how a
common carrier should pay its taxes, particularly on the
application of value-added tax (VAT) on goods and
services that were rendered in the country.
For
instance, the BIR ruled that the commission income or
fees received by the local shipping agents for outbound
freights or fares received by their foreign principals,
which are oceangoing carriers that docked in any port in
the country, will not be taxed.
“On the
other hand, commission income or fees received by the
local shipping agents pertaining to inbound
freights/fares received by their foreign
principals/online international sea carriers [or those
that have its Philippine office or branch] or pertaining
to freights/fares received by offline international sea
carriers shall be subject to VAT at 12 percent,” the
bureau said.
The
ruling also stipulates that transport of passengers,
goods or cargoes from one place to another anywhere in
the country shall be subjected to a 12-percent VAT and
any other income incidental to its operations.
International sea carriers, on the other hand, are not
subject to VAT but are subject to percentage tax under
the country’s Tax Code, which is 3 percent of their
gross receipts from outbound fares and freight.
On the
other hand, the bureau said domestic common carriers by
sea or air are subject to VAT, either the regular
10-percent VAT or the 12-percent output VAT on local
operations, while international operations are exempted
from this rule.
“Domestic common carriers, which transport goods and
cargoes by land, however, are already subject to VAT,”
it added.
“Common
carriers by land with respect to their gross receipts
from the transport of passengers, including operators of
taxicabs, utility cars for rent or hire driven by the
lessees and tourist buses used for the transport of
passengers shall be subject to the… percentage tax
imposed under Section 117 of the [Tax] Code, but shall
not be liable to VAT.” |
