BIR Ruling [DA-408-00]

November 27, 2000 BIR RULING [DA-408-00] House of Representatives Quezon City Attention: Chairman, Committee on Ways and Means Gentlemen : This refers to the public hearing conducted by the House Ways and Means Committee on August 22, 2000 at Hotel Rembrant wherein this Office was requested to submit Implementing Regulations on VAT on professionals. Please be informed that Revenue Regulations No. 19-99 was passed implementing Section 5 of Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997, and other pertinent provisions of the National Internal Revenue Code of 1997, imposing Value-Added Tax (VAT) on sale of services by persons engaged in the practice of profession or calling and professional services rendered by general professional partnerships; services rendered by actors, actresses, talents, singers and emcees; radio and television broadcasters and choreographers; musical, radio, movie, television and stage directors; and professional athletes, beginning January 1, 2000. Although R.R. No. 19-99 took effect beginning January 1, 2000, however, its implementation was deferred in view of Republic Act No. 8761 which took effect also on January 1, 2000, otherwise known as "An Act Imposing the Value Added Tax on Certain Services Beginning January 1, 2000, Amending for the Purpose Section 5 of Republic Act No. 8424 and for Other Purposes." We quote the pertinent portion of R.A. No. 8761 as follows: "SEC. 1. Section 5 of Republic Act No. 8424 is hereby amended to read as follows: "SEC. 5. Transitory Provisions . Effectivity of the Imposition of VAT on Certain Services . The imposition of the value added tax on the following services shall take effect on January 1, 2001. EHSTcC "(a) Services performed in the exercise of profession or calling subject to the professional tax as provided for under Republic Act No. 7160, otherwise known as the Local Government Code of 1991, and professional services performed by registered general professional partnerships; actors, actresses, talents, singers and emcees; radio and television broadcasters, choreographers; musical, radio, movie, television and stage directors; and professional athletes; xxx xxx xxx" Respectfully submitted. Very truly yours, DAKILA B. FONACIER Commissioner of Internal Revenue By: (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal and Inspection Group