Compensating tax.
Section 190
SEC. 190. Compensating tax. — On the commodities, goods, wares or merchandise purchased or received by persons residing or doing business in the Philippines, there shall be paid a compensating tax on the total value thereof, including freight, postage, insurance, commission and similar charges, equivalent to the percentage taxes imposed under this Title on original transaction effected by merchants, importers, or manufacturers, such tax to be paid before the withdrawal or removal of said commodities, goods, wares or merchandise from the customs house or the post office, except as follows: (a) Articles subject to the specific taxes under Title IV of this Code and articles to be used by the importer himself in the manufacture or preparation of articles subject to specific taxes; (b) Commodities, goods, wares or merchandise purchased or received by merchants, importers and manufacturers who are subject to tax under Sections one hundred eighty-four, one hundred eighty-four-A, one hundred eighty-five, one hundred eighty-five-A, one hundred eighty-five-B, one hundred eighty-six, one hundred eighty-six-B, or one hundred eighty-nine of this Title, where such importations are to be sold, resold, bartered or exchanged or are to be used in the manufacture or preparation of articles for sale, barter, or exchange and are to form part thereof; (c) Articles to be used by the importer himself in the manufacture or preparation of articles for export; (d) Articles to be used by the importer himself as passenger and/or cargo vessel of more than ten thousand tone, whether coastwise or ocean-going, including engine and spare parts of said vessel; Articles brought in by resident, including non-resident-citizens coming to resettle in the Philippines, and accompanying them upon their return or arriving within ninety days before or after their arrival; (e) Professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects belonging to persons coming to settle for the first time in the Philippines, for their own use and not for barter, sale or exchange, accompanying such persona, or arriving within ninety days before or, after their arrival, upon the production of evidence satisfactory to the Commissioner that such persons are actually coming to settle in the Philippines, that the articles were brought from their former place of abode, that change of residence is bona fide: Provided, That no vehicle, vessel, aircraft or merchandise of any kind, machinery or other articles for use in manufacture shall be classified under this subsection. If any article withdrawn from the customhouse or the post office without the payment of the compensating tax is subsequently used by the importer for other purposes, corresponding entry should be made in the books of accounts, if any are kept, or a written notice thereof sent to the Commissioner of Internal Revenue and payment of the corresponding compensating tax made within ten days from the date., of such entry or notice. If the tax is not paid within such period, the amount of tax shall be increased by twenty-Five per centum the increment to form part of the tax. In the case of tax free articles brought or imported into the Philippines by persons, entities or agencies, exempt from tax which are subsequently sold, transferred or exchanged in the Philippines to non-exempt private persons or entities, the purchasers or recipients shall be considered the importers thereof. The tax due on each article shall constitute a lien, on the article itself superior to all other charges or liens, irrespective of the possessor thereof. The provisions of existing laws to the contrary notwithstanding, exemptions from this tax shall be limited to the following: Those enumerated in this section; Those granted under Republic Act No. 51.86, as amended, Republic Act No. 6135, as amended, and Republic Act No. 5490; Those granted in pursuance of or in compliance with international treaties or commitments, such as the ADB-RP Host Agreement (1966), the 1947 Convention on Privileges and Immunities of the United Nations- and its Specialized Agencies; the United States Agency for International Development-RF Agreement; the 1947 Military Bases Agreement; and other similar treaties Or commitments; and Those that may be granted by the President upon recommendation of the NEDA in the interest of economic development.