Ibiden Philippines, Inc.

December 7, 2007 BIR RULING [DA-624-07] DA 031-07 Ibiden Philippines, Inc . First Philippine Industrial Park Barangay Sta. Anastacia Sto. Tomas, Batangas Attention: Atsushi Ishiwatari CAO/Director Gentlemen : This refers to your letter dated March 26, 2007 requesting for clarification as to whether or not Ibiden Philippines, Inc. (Ibiden) is still required to pass on the 12% value-added tax (VAT), on its sale of scrap, to Jen and Janette Junkshop (J&J), inasmuch as in BIR Ruling No. DA-031-07 dated January 19, 2007 , the BIR ruled that ASHEca ". . . considering that J&J is an importer in this case, the payment of the value-added tax on importation should be made by J&J directly to the Bureau of Customs as the agency tasked to collect the VAT on importation. Resultantly, Ibiden is not anymore required to impose the VAT on every sale of metal scrap. Ibiden, however, should be furnished a copy of the receipt of the payment of the VAT with the Bureau of Customs. This will therefore serve as your authority to request Ibiden to refrain from imposing VAT on the sale of scrap to J&J since the Bureau of Customs is also collecting the same before the goods are purchased and released." cHaICD A careful study of the aforesaid ruling, disclosed that the sale of scrap by a PEZA-registered enterprise to a buyer from custom territory is treated as technical importation. In the instant case, J&J is deemed the importer and shall be liable for the corresponding VAT on the said importation. Since Bureau of Customs is the government agency tasked to collect the aforesaid tax on importation, Ibiden is no longer required to impose VAT on the sale of scrap to J&J. Accordingly, it is safe to conclude that Ibiden is no longer required to pass on the 12% VAT on its sale of scrap to J&J. 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. EHSTcC Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service