BIR Ruling [DA-532-06]

September 4, 2006 BIR RULING [DA-532-06] Section 106; VAT Ruling No. 029-2002 Credible Foodlines Export 11386 Ipil-Ipil Faculty Hill, UPLB College, Laguna 4031 Attention: Mr. Valeriano C. Emata President Gentlemen : This refers to your letter dated July 24, 2006 requesting that the export sales of food commodities and other merchandise qualify for VAT zero rate. In reply, please be informed that Section 106(A)(2)(a) of the Tax Code of 1997, as implemented by Section 4.100-2(a) of Revenue Regulations No. 7-95, as amended further by Section 4.106-5 of Revenue Regulations No. 16-2005 which took effect November 1, 2005 subjects to zero percent (0%) rate: "Export Sales. 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 equivalent in goods and services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" Such being the case, your .export sales of food commodities and other merchandise to your foreign-based clients, which are paid for in acceptable foreign currency and are actually destined for consumption abroad, qualify for VAT zero-rate. This ruling is being issued on the basis of foregoing facts as represented. However, if upon investigation it shall be disclosed that the facts are different, then this ruling shall be considered null and void. DaCEIc Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service