Question & AnswerQ&A (Republic Act No. 4146)
The main purpose of Republic Act No. 4146 as amended is to provide tax exemptions on income derived from overseas shipping businesses for Filipino citizens or corporations with at least 60% Filipino ownership, to encourage participation in the overseas shipping industry and construction of modern boats for overseas service.
Any citizen of the Philippines or any association or corporation organized under Philippine laws with at least 60% Filipino capital ownership engaged exclusively in the overseas shipping business, or in the construction of modern boats for overseas service, are eligible.
The income tax exemption is granted for a period of ten years from the date of approval of the act and an additional five years after the expiration of the initial ten-year period.
At least 60% of the capital of the association or corporation must be owned by citizens of the Philippines.
Those who avail themselves of the loan assistance must invest all net profits realized during the exemption period in constructing, purchasing, or acquiring additional vessels and equipment and/or improving their existing vessels and equipment.
No, this law specifically applies to overseas shipping businesses and the construction of modern boats for overseas service.
The amendment took effect upon its approval on June 20, 1964.
It amended Section Two of Republic Act No. 1407.
It means the citizen, association, or corporation is solely involved in the overseas shipping business or construction of modern boats for overseas service, not engaged in other unrelated businesses.
The declared policy is to promote and develop the participation of Filipino citizens and corporations in the overseas shipping business and the construction of modern boats for overseas service.