BIR Ruling

December 13, 1977 The Amateur Softball Association (Philippines) Rizal Memorial Stadium P. O. Box 2272 Manila Attention: Gov . Isidro S . Rodriguez President Gentlemen : This refers to your letter dated October 17, 1977 to the Honorable, Presidential Assistant for Youth and Sports Development, Malacaang, Manila; stating that your Association has been given the honor of hosting the First ASEAN Women and Second ASEAN Men Softball Championships to be held simultaneously on December 10-18, 1977 at the Rodriguez Sports Center in Marikina, Metro Manila; that this Sports project will involve tremendous expenses on your part since it is an International commitment where the activity will be participated by five ASEAN countries; and that the terms and conditions of the championships include the responsibility of the host to provide hotel and meals to the participating teams. Under the foregoing circumstances, you now request for tax exemption on the hotel and meal bills of the teams. In reply, I have the honor to inform you that your request cannot be granted for lack of legal basis. The 3% and 7% taxes levied on the gross receipts from the sale of food and drinks which will be served to the participating teams in accordance with Section 206 (formerly Section 191-A) of the Tax Code of 1977, and the 3% tax on hotel receipts prescribed in Section 205 (formerly Section 191) of the same Code, are taxes directly payable by the hotel operator and not on the Amateur Softball Association (Phil.) which incidentally foots the bills of the participating teams. It may be stated in this connection, that the exemption from the internal revenue and science and documentary stamp taxes on hotel receipts and the 3% percentage tax on the hotel revenue from the hotel room occupancy granted by Presidential Decree No. 31, as implemented by Revenue Regulations No. 10-72 dated November 8, 1972 is accorded only to foreign tourists and travelers and only if the payment of the hotel room charges is effected in any of the acceptable foreign currencies. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8