BIR Ruling [DA-169-02]

September 17, 2002 BIR RULING [DA-169-02] Section 105 Tax Code VAT Ruling No. 041-2001 First Datacorp 3rd Floor Citibank Center 8741 Paseo de Roxas Makati City Attention: Resiree T. Co Account Manager Gentlemen : This refers to your letter dated April 18, 2002 requesting for a ruling as to what would be the treatment of the 10% VAT being billed to De La Salle University by reason of your sale of Microsoft licenses sometime in January 2002. In reply thereto, please be informed that pursuant to Section 105 of the Tax Code. VAT, being an indirect tax, may be shifted or passed on to the buyer of goods and services. And since VAT is the direct liability of the seller, once shifted, it is no longer a tax on the part of the buyer but an additional cost which the said buyer must pay to obtain the goods or services ( VAT Ruling No. 041-2001 dated July 5, 2001). Accordingly, De La Salle University, as the buyer of Microsoft licenses cannot invoke that it should not be billed a 10% VAT for being a non-VAT entity. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal & Inspection Group