BIR Ruling [DA-363-05]

August 25, 2005 BIR RULING [DA-363-05] 108 (A) One Step Drug Test Center 1415-A Tayuman Street Sta. Cruz, Manila Attention: Ms. Emelyn B. Adorable Owner/General Manager Gentlemen : This refers to your letter dated November 9, 2004 requesting a ruling as to whether or not the services rendered by One Step Drug Test Center are subject to the value-added tax. It is represented that One Step Drug Test Center, located at 1415-A Tayuman Street, Sta. Cruz, Manila is engaged in conducting initial screening of professional drivers, private and public employees for possible drug abuse; that it is registered with the Department of Trade and Industry under Certificate of Registration No. 745559 dated January 25, 2001; and that it has been accredited with the Department of Health pursuant to Republic Act No. 9165. In reply, please be informed that Section 108(A) provides viz : "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. "(A) Rate and Base of Tax. There shall be levied, assessed and collected, a value-added tax equivalent to ten percent (10%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties. "The phrase "sale or exchange of services" means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration . . . and similar services, regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties." Thus, the services rendered by One Step Drug Test Center are subject to the 10% value-added tax imposed under Section 108(A) of the Tax Code of 1997. cDaEAS 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.) JOSE MARIO C. BUAG OIC-Commissioner of Internal Revenue