Amendment on Taxation of Imported Luxury Articles

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Republic Act No. 1511: Amendment on Taxation of Imported Luxury Articles

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Title Source: Supreme Court: Amendment on Taxation of Imported Luxury Articles

Law: Republic Act No. 1511

Decision Date: Jun 16, 1956

The amendment to the National Internal Revenue Code in the Philippines requires importers to pay percentage taxes in advance based on the import invoice value of articles, with specific rates for different types of articles, and addresses the tax due on luxury articles brought or imported tax-free by tax-exempt persons and subsequently sold to non-exempt private individuals or entities.

Law Summary

Imposition of Compensating Tax on Resale of Tax-Free Luxury Articles

Section 190 of the National Internal Revenue Code is amended by adding provisions concerning luxury articles originally brought or imported tax-free.
Subsequent sale or transfer to non-exempt private entities triggers the imposition of a compensating tax.
The compensating tax bases on the market value and is payable by the purchaser within 30 days of sale or transfer.
Failure to pay within this period incurs a 25% increase, which forms part of the tax.
The tax creates a superior lien on the article for five years in favor of the government if the possessor acquired it with actual or constructive knowledge of its tax-free status.
When lien enforcement is impossible, the original exempt vendor becomes liable for the compensating tax.

Effective Date of the Amendment

The law became effective immediately upon approval on June 16, 1956.

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