4/7/2021
E-Library - Information At Your Fingertips: Printer Friendly
Q-5: Are detention fees and other charges collected by international sea
carriers subject to tax?
A-5: Detention fees and other charges relating to outbound cargoes and
inbound cargoes are all considered Philippine-sourced income of the
international sea carriers they being collected for the use of property or
rendition of services in the Philippines, and are subject to the Philippine
income tax under the regular rate, and to the Value added tax, if the total
annual receipts from all the VAT-registered activities exceeds one million five
hundred thousand pesos (P1,500,000.00). However, if the total annual gross
receipts do not exceed one million five hundred thousand pesos, said
taxpayer is liable to pay the 3% percentage tax.
xxx
Q-14: Are sales of goods, supplies, equipment, fuel and services to persons
engaged in international shipping operations subject to VAT?
A-14: The sale of goods, supplies, equipment, fuel and services including
leases of property) to the common carrier to be used in its international sea
transport operations is zero-rated. Provided, that the same is limited to
goods, supplies, equipment, fuel and services pertaining to or attributable to
the transport of goods and passengers from a port in the Philippine directly
to a foreign port without docking or stopping at any other port in the
Philippines to unload passengers and/or cargoes loaded in and from another
domestic port; Provided, further, that if any portion of such fuel, equipment,
goods or supplies and services is used for purposes other than that
mentioned in this paragraph, such portion of fuel, equipment, goods,
supplies and services shall be subject to 12% VAT.
xxx
Q-34: Are commission incomes received by the local shipping agents from
their foreign principals subject to VAT?
A-34: The commission income or fees received by the local shipping agents
for outbound freights/fares received by their foreign principals which are online international sea carriers (touching any port in the Philippines as part of
their operation) shall be zero-rated pursuant to the provisions of Section
108(B)(4) of the Code. Said provision does not require that payments of the
commission income or fees for "services rendered to persons engaged in
international shipping operations, including leases of property for use
thereof," be paid in acceptable foreign currency in order that such
transaction may be zero-rated. On the other hand, commission income or
fees received by the local shipping agents pertaining to inbound
freights/fares received by their foreign principals/on-line international sea
carriers or pertaining to freights/fares received by off-line international sea
carriers shall be subject to VAT at 12%.
Five (5) years after the enactment of RA 9337, on December 6, 2010, petitioners
Association of International Shipping Lines, Inc.[3] (AISL), APL Co. Pte. Ltd.[4] (APL),
and Maersk-Filipinas, Inc. (Maersk) sought to nullify RMC 31-2008 via a petition for
declaratory relief entitled "Association of International Shipping Lines, Inc. (AISL), APL
https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/65912
2/25