BIR Ruling [DA-124-00]

February 24, 2000 BIR RULING [DA-124-00] Philippine Firelight Youth Society for Rural Restoration Multi-Purpose Cooperative, Inc . San Roque, Aposkaoy Claveria, Misamis Oriental Attention: Mr . Tonimer H . Alfeche Director Gentlemen : This refers to your letter dated March 16, 1999 requesting for a ruling on the tax consequence of the donation of farm equipment in your favor by the Korean Rural Restoration Society of the Decalogue Stone Country. It is represented that you are an agricultural multi-purpose cooperative duly registered with the Cooperative Development Authority (CDA) with Certificate of Registration No. CGY-1892 issued on January 30, 1995; and that in the spirit of brotherhood, cooperation and humanitarian consideration, the Korean Rural Restoration Society of the Decalogue Stone Country, a non-resident foreign corporation, with principal and office address at Kyungbuk, Sangju, Waesuh-myun, Daejeon-ri, #66, Republic of Korea donated farm equipment in your favor. In reply, please be informed that pursuant to Section 109(r) of the Tax Code of 1997, stating "Sec. 109. Exempt Transactions , The following shall be exempt from the value-added tax: "(a) . . . "(b) ... ... ... "(r) Sales by agricultural cooperatives duly registered with the Cooperative Development Authority to their members as well as sale of their produce, whether in its original state or processed form, to non-members; their importation of direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production and/or processing of their produce . (Emphasis supplied) "xxx xxx xxx the donation (importation) of farm equipment by the Korean Rural Restoration Society of the Decalogue Stone Country is exempt from the value-added tax (VAT); provided however, that such direct farm inputs, machineries and equipment including spare parts thereof shall be used directly and exclusively in the production and/or processing of your produce. This ruling is being issued on the basis of the foregoing representations. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group