TOPIGS Philippines, Inc.

June 1, 2010 BIR RULING [DA-(VAT-012) 084-10] Section 109 (a); VAT Ruling 043-98 TOPIGS Philippines, Inc. Suite 2304 Antel Global Corporate Center Julia Vargas Avenue, Ortigas Center Pasig City Attention: Dalia C. Patio Finance Supervisor Gentlemen : This refers to your letter dated July 30, 2009 requesting for exemption from payment of the value added tax (VAT) on the importation by your company of live pigs to be used in breeding programs. It is represented that TOPIGS Philippines, Inc. (TOPIGS), with TIN-003-251-555-000, is a livestock trader providing quality pig genetics to the country's pig industry; that TOPIGS implements appropriate breeding programs through its farm production partners; and that in order to maintain the quality of animals, TOPIGS is considering importing live pigs from abroad to achieve competitive performance results. In reply, please be informed that the importation of breeding stock for livestock generally used as foods for human consumption is exempt from VAT pursuant to Section 109 (A) of the Tax Code of 1997, as amended by Republic Act No. 9337, which states, viz. : cCAIDS "SEC. 109. Exempt Transactions. (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax: (A) Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding, or producing foods, for human consumption; and breeding stock and genetic materials therefore." The above provision is implemented by Section 4.109-1 of Revenue Regulations (RR) No. 16-2005 which reads in part that: "(1) Subject to the provisions of Sec. 4.109-2 hereof, the following transactions shall be exempt from VAT: (a) Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding, or producing foods, for human consumption; and breeding stock and genetic materials therefore." Livestock shall include cows, bulls and calves, pigs, sheep, goats and rabbits. Poultry shall include fowls, ducks, geese and turkey. Livestock or poultry does not include fighting cocks, race horses, zoo animals and other animals generally considered as pets. xxx xxx xxx" Accordingly, inasmuch as pigs are classified as livestock generally used as food for human consumption, and considering further that the pigs to be imported are breeding stock intended for improving the quality of pigs raised and bred by TOPIGS, the importation of said breeding stock by TOPIGS shall be exempt from the imposition of VAT pursuant to Section 109 (a) of the Tax Code. You are henceforth advised to secure an Authority to Release Imported Goods (ATRIG) from the Revenue District Office where the port of entry is located to facilitate the release of your importations. 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 as null and void. IaEASH Very truly yours, (SGD.) GREGORIO V. CABANTAC Deputy Commissioner Legal and Inspection Group