BIR Ruling [DA-217-05]
BIR Ruling [DA-217-05] • Bureau of Internal Revenue (BIR) Issuances • Rulings (Unnumbered) • May 3, 2005
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May 3, 2005 BIR RULING [DA-217-05] Ms. Teresita S. Opea 6th Flr. Executive Bldg. Center Gil Puyat Avenue cor. Makati Avenue Makati City M a d a m : This refers to your letter dated November 17, 2004, requesting in behalf of your client SPECIALTY SEWING, INC., with business address at Km. 17 East Service Road, Sucat, Paraaque City, clarification on whether or not it is exempt from withholding tax. It can be ascertained from records submitted that your client is a 100% export-oriented enterprise, being a subcontractor of Crismina Garments Inc., a 100% exporter; that it has been granted a zero-rate VAT status on its sewing services for the period January 1, 2004 to December 31, 2004; that it was issued a VAT Tax Credit Certificate (TCC); that it is your argument that should your client's services be subjected to withholding tax, it will have a carry-over withholding tax every year due to the application for issuance of VAT TCC. In reply, please be informed that your argument holds no water. As per record, you are granted a zero-rate VAT status on your value-added tax liabilities. This zero rating, however, is not an exemption from your liabilities for withholding taxes. Muchless, you are not accorded under any law, exemption from the same. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group
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