Westminster High School

April 13, 2007 BIR RULING [DA-226-07] VAT 063-02 Westminster High School 60-68 Honorio Lopez Boulevard Tondo, Manila Attention: Ms. Leonisa L. Pascual Senior Supervisor Gentlemen : This refers to your letter dated February 15, 2007, which was referred to this Office by Revenue Region No. 6, Manila, by way of its 1st Indorsement dated February 20, 2007, requesting for exemption from the payment of value-added tax (VAT) on its purchases from the VAT-registered entity. It is represented that Westminster High School is a non-stock, non-profit educational institution and was granted Certificate of Government Recognition No. 10(c), s. 73 dated June 16, 1973 for its complete Secondary Course and Government Recognition No. 73, s. 1955 dated April 11, 1955 for Kindergarten Course and Government Recognition No. 9, s. 1973 dated June 8, 1973 for Complete Elementary Course per Certification duly issued on January 6, 2006 and January 9, 2006, respectively, by Teresita G. Domalanta, CESO III, Director IV of the Department of Education, National Capital Region. In reply thereto, please be informed that this Office had already occasion to rule on the matter when it said in BIR VAT Ruling No. 063-02 dated September 16, 2002 , that ". . . VAT is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services". Accordingly, your purchases of goods or services . . . are not exempt from VAT." In stressing the rationale of the above-mentioned rule, this Office elucidates the matter that since a non-stock, non-profit educational institution is exempt only from direct taxes such as income tax and other passive income, as prescribed under the 1987 Philippine Constitution, this exemption can not be extended to indirect taxes like VAT. Accordingly, its purchases of goods and services from a VAT-registered entity is nevertheless subject to VAT as imposed under Sections 106 to 108 of the Tax Code of 1997, as amended by Republic Act No. 9337, as implemented by Revenue Regulations No. 16-2005. CHDAaS 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. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service