8/12/2019 356. Tax Rule for Airport Terminal Fees RMP
8.10.12(1)
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BDB Laws Tax Law for Business appears in the opinion section
ofBusiness Mirror everyThursday.
Tax rule for airport terminal fees
EFFECTIVE August 1, 2012, Domestic Passenger Service Charge
(DPSC) commonly knownas airport terminal fee, which passengers pay
at designated counters in the Ninoy AquinoInternational Airport
(Naia), shall now be paid upon purchase of airline tickets through
Internetbooking, airline ticket offices and ticketing or travel
agents.
On July 13, 2012, Revenue Memorandum Circular (RMC) 34-2012 was
issued by the Bureau ofInternal Revenue (BIR) clarifying the tax
implications of integrating the airport terminal fee at thepoint of
sale of airline tickets, specifically the invoicing and recording
of the terminal fee in the
books of airline companies and Manila International Airport
Authority (Miaa).
Under the RMC, the airline company shall collect the terminal
fee from passengers and shallinclude it in the official receipt to
be issued to the passenger on which the output tax shall
becomputed. Upon collection, the amount shall be recorded as income
and the correspondingoutput tax shall be recognized as a
liability.
Upon remittance of the collected terminal fee to Miaa, the Miaa
will, in turn, issue an officialreceipt to the airline company
acknowledging the receipt of the income. The official receiptshall
indicate the amount of terminal fee collected and the corresponding
value-added tax(VAT).
While the terminal fee received is to be reported as an income
of Miaa, such payment shall notbe considered as part of Miaas gross
receipts subject to creditable withholding tax.
On the part of the airline company, the remittances made to Miaa
are to be booked as thecomplete reversal of the entries made upon
collection. The amount of output tax recognizedupon collection from
the passenger will be the same amount of input tax upon remittance
ofthe amount to Miaa.
For acting as collecting agent for Miaa, the airline company
will receive service fees from Miaa.Such service fees shall be
subject to VAT and governed by the rules on government
moneypayments subject to withholding VAT and expanded withholding
tax.
