Philippine Council for NGO Certification

October 16, 2008 BIR RULING [DA-(VAT-015) 303-08] Philippine Council for NGO Certification 6/F SCC Bldg., CFA-MA Compound 4427 Interior Old Sta. Mesa Road Sta. Mesa, Manila Attention: Ms. Fely I. Soledad Executive Director Gentlemen : This refers to your letters dated August 10, 2007 and October 8, 2007 requesting for a reconsideration of VAT Ruling No. 006-2007 dated April 23, 2007 which ruled as follows: "xxx xxx xxx The processing fee and annual fee PCNC charges for the performance of services as an accrediting entity are subject to VAT. The VAT component of the sale of service must be based on charges constituting administrative overhead and operational costs plus any mark-up being billed by PCNC. The VAT may be passed on by PCNC to the foundation-applicant. xxx xxx xxx" The above ruling was based on Section 105 of the National Internal Revenue Code, as amended and the decision of the Supreme Court in Commissioner of Internal Revenue vs. Court of Appeals and Commonwealth Management and Services Corporation, G.R. No. 125355, March 30, 2000. It appears that you have neither presented any argument to persuade this Office, nor cited legal basis, to support your request for reconsideration. CcaASE A tax cannot be imposed unless it is supported by the clear and express language of a statute. On the other hand, once a tax is unquestionably imposed, a claim of exemption from tax payments must be clearly shown and based on a language in the law too plain to be mistaken ( Davao Gulf Lumber Corporation vs. Commissioner of Internal Revenue and Court of Appeals, G.R. No. 117359, July 23, 1998). Moreover, laws granting exemptions from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. Finding no cogent reason to reverse our ruling, this Office reiterates, as it hereby reaffirms, its previous ruling on the matter. The law may be harsh but it is the law. This Office has no recourse but to apply the law as it is written. This constitutes our final decision on the matter. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service