STAT_CON

Association of International Shipping Lines vs. Secretary of Finance (g.r. no. 222239, January
15, 2000)
In 2013, Secretary of Finance issued the Implementing Rules and Revenue Regulation no. 15-
2013 for Revenue Regulations Implementing RA 10374, or the Act recognizing the principle of
reciprocity as basis for the grant of income tax exemptions to international carriers.
For the taxability of income other than Income from international transport services, all items
of income derived by international carriers that do not form part of the gross Philippine Billings
shall be subjected to tax which is 2.5 % under the provisions of National Internal Revenue Code.
Demurrage fees, which are in nature rent for the use of property of the carrier in the
Philippines are subject to Philippine income tax under regular rate.
Hence, the petition.
Accordingly, by the petitioners, RR 15-2013 unduly widens the scope of RA 10378 imposing
additional taxes on international shipping carriers not provided by law.
Issue: Whether Revenue Regulation no 15-2013 is not valid Revenue regulation.
Ruling: Supreme Court found RR no 15-2013 to be a reasonable tax, affirming the ruling of the
Regional trial court.
RR does not expand the provisions of the RA 10378. It simple clarifies what constitute Gross
Philippine Billings, such that anything outside its definition is subject to regular income tax rate
for resident foreign corporations. Law need not specifically mention demurrage or detention
fees as among those falling outside of the definition of GDP.
Gross Philippine Billing under the National Internal Revenue Code, as amended by RA 10378,
determines that in computing for Gross Philippine Billings of international sea carriers, there
shall be included the total amount of gross revenue whether for passengers, cargo, and/or mail
originating from the Philippine up to the final destination. Any other income is subject to the
regular income tax rate.
In here applies the statutory principle of when the law is clear, there is no other resource but to
apply it regardless of its perceived harshness. Dura lex sed lex.