BIR Ruling [DA-481-04]

September 10, 2004 BIR RULING [DA-481-04] 109 (n) VAT Ruling 220-90 Mr. Abdulmari "Toym" De Leon Imao, Jr. 41-C Mahabagin Street Teacher's Village East Diliman, Quezon City S i r : This refers to your letter dated July 1, 2004 requesting for an opinion that the sale by an artist himself of his works of art is exempt from value-added tax (VAT) under Section 109(n) of the Tax Code of 1997. It is represented that you are a renowned Muslim Filipino sculptor as Certified by Ms. Evelyn B. Pantig, Chairman of the National Commission for Culture and the Arts; that you have received awards for a number of local various arts competitions, which include the Grand Prize in the Letras Y Figuras Competition of the Instituto Cervantes; and that your work, "Mimosa" gained international attention in the 2nd Hue International Sculpture Symposium in Vietnam. In reply thereto, please be informed that Section 109(n) of the Tax Code of 1997 provides that sale by the artist himself of his works of art, literary works, musical compositions and similar creations, or his services performed for the production of such works is exempt from the 10% value-added tax. The term "artist" means a person who practices one of the fine arts, esp. painting or sculpture. (Webster's Dictionary) In BIR VAT Ruling No. 220-90 dated December 12, 1990, this Office had already occasioned to rule on the matter, when it said that ". . . sale of artwork is exempt from VAT pursuant to then Section 103(n) of the Tax Code if the seller is the artist himself as when the invoice issued to the buyer is the non-VAT invoice of the artist consignor. . . ." SUCH BEING THE CASE, since you are an artist as certified to by the National Commission for Culture and the Arts, your sale of sculpture is exempt from the 10% VAT as prescribed in Section 109(n) of the Tax Code of 1997. DaHISE 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 Deputy Commissioner Legal & Inspection Service