BIR Ruling [DA-071-00]

February 2, 2000 BIR RULING [DA-071-00] Santos, Tardecilla, Verdolaga & Co . Suite 505-C, ITC Building 337 Gil Puyat Avenue Makati City Attention: Mr . Virgilio R . Santos Partner Gentlemen : This refers to your letter dated November 10, 1998 stating that your client, Center for Information Technology Exponents, Inc . (CITEI) , is a domestic corporation engaged in providing computer support services to its customers; that right now, your client has an existing contract with the U.S. Department of Veterans Affairs with office address at 4201 Roxas Blvd., Pasay City; that your client, by virtue of the said contract, is passing on the value-added tax to the U.S. Department of Veterans Affairs; that however, the U.S. Department of Veteran Affairs is exempt from the value-added tax by virtue of the international law principle of reciprocity; and that a copy of BIR Ruling No. 26-95 dated February 14, 1995 was provided by the Embassy of the United States of America to your client as proof that the U.S. Veterans Affairs is indeed exempt from Philippine internal revenue taxes. Based on the foregoing representations and documents submitted, you are now requesting, in effect, for a ruling that the services being rendered by your client to the U.S. Veterans Affairs are not subject to the value-added tax. In reply, please be informed that under BIR Ruling No. 026-95 dated February 14, 1995, it is stated therein that the records show that the Department of Foreign Affairs, Office of Protocol, in its 1st Indorsement dated May 21, 1993, favorably indorsed the grant of tax exemption to, among others, Veterans Affairs Office being an affiliated agency of the United States Mission in the Philippines on the ground of international law principle of reciprocity. Hence, it was ruled that the tax exempt status of the U.S. Mission in the Philippines is extended to, among others, Veterans Affairs Office of the U.S. Mission in the Philippines. Accordingly, your opinion that services being provided by your client, Center for Information Technology Exponents, Inc., to the U.S. Veterans Affairs Office are exempt from the Philippine value-added tax, is hereby confirmed. (BIR Ruling No. 026-95 dated January 14, 1995) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. IHSTDE Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. EQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)