BIR Ruling [DA-402-03]

November 10, 2003 BIR RULING [DA-402-03] Asia Perlite Products, Inc . Rm. 1505 Cityland Condominium 10, Tower 1 6815 Ayala Avenue, Makati City Attention: Mr . Edward B . Donato Managing Director Gentlemen : This refers to your letter dated April 24, 2001, requesting for a certification that your transactions are subject to zero percent (0%) VAT, being an export-oriented firm whose annual sales consist of 100% export sales. You have also represented that you are engaged in the manufacture/processing of other non-metallic mineral products (PERLITE) for export; and that for the past two (2) years you are also trading/buying Perlite products from your suppliers also solely for export. In reply, please be informed that Section 106(A)(2)(a)(1) of the Tax Code of 1997 provides, viz: "(2) [Zero-rated Sales] The following sales by VAT-registered persons shall be subject to zero-percent (0%) rate: "(a) Export sale. The term 'export sales' means: "(1) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko ng Sentral ng Pilipinas (BSP): Accordingly, as a VAT-registered person your export sales which are paid for in US dollars as evidenced by photocopies of Letters of Credits and Telegraphic Transfers, are entitled to the benefit of zero percent (0%) VAT. 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. cCESaH Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group