Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
ANNEX A
3. Service fee billed in 1987 but collected in 1988 is subject to the 10% VAT if
billing is made on projects not completed prior to 1988. However, under Sec. 6(g)(3) of
Revenue Regulations No. 5-87, amounts due on contracts completed on or before
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December 31, 1987, and payments for which are receivable on or after January 1, 1988
shall be considered accrued as of December 31, 1987, and payments for which are
receivable on or after January 1, 1988 shall be considered accrued as of December 31,
1987, such that the amount to be actually received in 1988 is subject to the 4%
contractor's tax provided conditions under said section are met, to wit: cdasia
(b) The contractor billed the unpaid amount not later than December 31,
1987, and copy of such billing is attached to the information return
required in (a);
(c) The contractor has recorded in his books of accounts for the year
1987, the amount receivable; and
(d) The contractor files not later than January 20, 1988 and on or before
the 20th day after each calendar quarter, the regular contractor's tax
return for the payment of the contractor's tax on payments received in
1988.
4. FIRB Resolution No. 17-87 restored the tax and duty exemption privileges of
the National Power Corp. (NPC), including those pertaining to its domestic purchases of
petroleum products granted under the terms and conditions of Commonwealth Act No.
120, as amended, effective March 10, 1987. However, the restoration of the tax and duty
exemption privileges does not apply to importations of fuel oil (crude equivalent) and coal,
commercially-funded importations (i.e., importations which include but are not limited to
those foreign-based private financial institutions, etc.), and interest income derived from
any source. Such exemption also does not include purchases of goods and services, hence,
any contracting services with NPC is not qualified for zero-rating. (VAT Ruling No.
250-89 dated Oct. 5, 1989).
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by their suppliers since the VAT is an indirect tax which may be shifted by the seller to the
buyer. Such being the case, they cannot apply for a tax credit or a tax refund of the input
taxes on their purchases since such privilege is limited only to a VAT-registered person in
respect to his (a) export sales, (b) zero-rated or effectively zero-rated sales, or (c) on
capital goods purchased. None of the foregoing legal requisites may be availed of by an
area headquarter of a multinational company. This finds support in VAT Ruling No.
256-88. (VAT Ruling No. 252-89 dated October 5, 1989).
7. The VAT exemption granted to certain entities is limited only to the taxes
they are directly liable. This privilege does not exempt them from the taxes passed on to
them by their suppliers of goods and services (VAT Ruling No. 253-89 dated October 5,
1989) aisa dc
10. In the business involving sale of service, it is the seller rather than the buyer
who is subject to 10% Value Added Tax (Sec. 99 and 102, NIRC). However, by operation
of law, the tax is passed on to the buyer, whether or not the tax is separately billed in the
seller's invoice. Accordingly, billings for each sale should include the 10% VAT except if
the sale is qualified for zero-rated VAT (Sec. 102, NIRC) or if the same is VAT-exempt
(Sec. 103, NIRC). Hence, in the sale of janitorial and other allied services to the Philippine
Navy, such transaction being neither zero-rated nor VAT-exempt, the seller of services is
the one liable for the payment of VAT but may pass on the tax to the Philippine Navy.
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(VAT Ruling No. 256-89 dated October 13, 1989).
11. Business involving cost centers which issue invoices/receipts for service
rendered to affiliated companies on a cost basis partakes the nature of a service and is
subject to VAT in accordance with Sec. 102(a) of the Tax Code. Furthermore, if the VAT
is not billed separately in the invoice or receipt, the VAT is presumed to be included in the
total cost. (VAT Ruling No. 257-89 dated Oct. 13, 1989).
12. The VAT on the income of job placement agencies is based on the placement
fees but does not include the portion of the total amount received only held in trust and
intended for payment to another person (e.g., expenses for documentation and processing)
provided that such payment is made in behalf and for the account of the job applicants and
are supported by receipts issued by the supplying company or a government agency, in the
name of the applicant worker. (VAT Ruling No. 258-89 dated Oct. 13, 1989).
14. Deposits for returnable containers shall be subject to the 10% VAT and
should be declared in Schedule B-1 of BIR Form No. 2550 in accordance with Revenue
Regulations No. 3-89.
The sale of motor vehicles to employees is considered a sale of capital goods and is
subject to the 10% VAT based on the actual selling price or fair market value, whichever
is higher, pursuant to Section 3 of Revenue Regulations No. 5-87.
Assets considered junk and/or retired, when sold later, are subject to the 10%
VAT. This finds support in VAT Ruling No. 206-88. cdt
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16. Pursuant to BIR Ruling No. 493-88 (dated October 12, 1988), prawn feeds
can be classified as fish feeds, the importation/sale of which is exempt from the
value-added tax pursuant to Section 103(c) of the Tax Code (VAT Ruling No. 262-89
dated October 23, 1989). Such exemption is applicable to the importation and sale of said
product in all stages of distribution. (VAT Ruling No. 267-89 dated October 26, 1989).
17. Although a real estate dealer/lessor, who is engaged in the development and
sale of real properties (e.g., buildings), is exempt from VAT and is not required to register
pursuant to Section 9(b)(15) of Revenue Regulations No. 5-87 and Sec. 103(q) of the Tax
Code, his importation of basic and essential parts (such as but not limited to elevators,
conveyors, etc.) needed to finish a building project is subject to the 10% VAT under
Section 101 of the same Code. (VAT Ruling No. 263-89 dated October 23, 1989).
18. Pursuant to Section 102(a)(2) of the Tax Code, income received by a
company from its foreign principals for rendering the following services:
a. shipping agency;
b. shipping agency husbanding;
c. shipping agency equipment rental;
d. brokerage;
e. seafreight cargo forwarding/handling; and
f. air freight cargo forwarding/handling
are considered as zero-rated sales of services provided that payment is made in acceptable
foreign currency which is inwardly remitted to the Philippines and accounted for in
accordance with the rules and regulations of the Central Bank of the Philippines. (VAT
Ruling No. 264-89 dated October 26, 1989).
20. The Manila Bethel Temple, Inc., a religious organization, is exempt from all
taxes to which it is directly liable, on activities conducted not for profit. Such activities
include gross receipts from the following sources.
b) Receipts from the Music College and the Bible College in the form of
offerings on a voluntary basis; and
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c) Receipts from the Bible College in the form of offerings on a
voluntary basis.
Such being the case, the VAT registration of said corporation is void ab initio and
the corporation is advised to apply for the cancellation of its registration and to surrender
its VAT Registration Certificate and unissued VAT invoices (for cancellation) (VAT
Ruling No. 266-89 dated October 26, 1989).
23. After an evaluation of the circumstances behind the late VAT payment of
Ericsson Network Philippines, request for the abatement of surcharge and interest for late
filing and payment of said company's VAT liability is approved, but limited only to the
25% surcharge. This is in line with the policy of liberality during the initial implementation
of the VAT system, considering that said payment is for the initial quarter. This revokes
VAT Ruling No. 149-89. (VAT Ruling No. 270-89 dated October 31, 1989).
25. The request to use one invoice for both VAT taxable and VAT exempt
transactions is denied since according to Section 21 of Revenue Regulations No. 5-87, it is
mandatory that where a VAT-registered person is also engaged in VAT exempt sales, it
shall issue a separate VAT invoice for the VAT taxable transactions and a non-VAT
invoice for the exempt transactions. (VAT Ruling No. 272-89 dated October 31, 1989).
* Received a downpayment on a contract which provides that the contractee
shall assume all taxes thereby presuming that it shall be the responsibility of the latter to
pay the corresponding VAT on the downpayment received in 1988.
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Endnotes
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Annex A
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