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

Key points

1. International carriers. Transport of passengers by international carriers doing business in the Philippines is VAT-exempt under Section 109(1)(S) of the NIRC, as amended by RA No. 10378. Transport of cargo is VAT-exempt under Section 109(1)(E) because it is subject to Common Carrier’s Tax under Section 118. These carriers may not register for VAT.
2. Vessels and aircraft. Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts, for domestic or international transport operations is exempt. VAT exemption on importation and local purchase of passenger and/or cargo vessels remains subject to the MARINA restriction on vessel importation and mandatory vessel retirement program.
3. Fuel, goods and supplies. Importation of fuel, goods and supplies by persons in international shipping or air transport is exempt if used exclusively for transport directly between a Philippine port and a foreign port, without stopping at another Philippine port. A stop is allowed only to unload passengers or cargo from abroad or to load passengers or cargo bound for abroad.
4. Use for other purposes. Any portion of such fuel, goods or supplies used for other purposes is subject to twelve percent (12%) VAT starting February 1, 2006.

Who is affected

• International carriers doing business in the Philippines
• Persons engaged in international shipping or air transport operations

Deadlines and effectivity

• 12% VAT on fuel, goods or supplies used for other purposes: starting February 1, 2006