BIR Ruling [DA-263-04]

May 17, 2004 BIR RULING [DA-263-04] Section 105 VAT Ruling 072-2001 Promo Network Employment Agency, Inc. 6031 Kalayaan Avenue, Barangay Olympia, Makati City Attention: Ms. Karen C. Sunico Gentlemen : This refers to your letter dated May 16, 2003 requesting for a clarification on the following issues: 1. Whether the Value Added Tax, as claimed by AIM Acceed, is indeed included in the exemption given to AIM Acceed, as stated in the BIR ruling on educational institutions; 2. If they are truly exempted to pay the VAT, how are AIM Acceed's suppliers charged VAT? Or are the suppliers exempted from the VAT payment, too? It is represented that you are currently offering to deploy waiters, kitchen personnel and housekeeping attendants at the Asian Institute of Management Conference Center (AIM Acceed);that you have been informed that AIM Acceed is exempted from paying the 10% VAT from the total billing; and that AIM Acceed claims exemption from taxes and duties covered by a BIR Ruling on educational institutions. In reply, please be informed that the 10% VAT is an indirect tax and the amount may be shifted or passed on to the buyer, transferee or lessee of the goods, properties and services. (Sec. 105, NIRC of 1997) Since there is no showing that the Asian Institute of Management Conference Center (AIM Acceed) is exempt from indirect tax under any existing law, its purchases of goods, properties or services from VAT-registered entities are subject to 10% VAT, which amount of tax may be passed on to it and shall form part of the invoice price for the services you will render to it. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group