BIR Ruling [DA-493-03]

December 10, 2003 BIR RULING [DA-493-03] Sec. 105; VAT Ruling Nos. 066-2001; 052-2000; 060-2000 Third World Movement Against the Exploitation of Women (TW-MAE-W) 41 Rajah Matanda, Proj. 4, Quezon City Attention: Sister Mary Soledad Perpian, RGS Coordinator Gentlemen : This refers to your letter dated November 17, 2001 requesting exemption from VAT as a non-stock, non-profit charitable institution. It is represented that the Third World Movement Against the Exploitation of Women (TW-MAE-W) has a special ministry for sexually exploited and sexually abused women and children; that you run direct services for the survivors of incest, rape and the sex-trade in seven drop-in centers and three shelters in Metro Manila, Luzon Visayas and Mindanao; and that you urgently have to purchase a passenger van for your shelter but your fund falls short of the price; hence, the instant request for VAT exemption. In reply, this Office regrets that your aforementioned request for exemption from the 10% VAT cannot be granted for lack of legal basis. The value-added tax is the liability of the seller of goods and services so that absent any showing that the said seller is exempt from tax, the sale could not be exempted from the imposition of the VAT. (VAT Ruling No. 066-2001) However, since VAT is an indirect tax, the amount of tax may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services. (Sec. 105, 1957 Tax Code). Accordingly, TW-MAE-W is liable to shoulder the passed-on VAT on the purchase of a passenger van which forms part of the invoice price thereof. (VAT Ruling Nos. 052-2000 and 060-2000) aCSHDI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group