Gold Rose Handicraft International

October 30, 2008 BIR RULING [DA-(VAT-025) 373-08] 106 (A) (2) (a); VAT Ruling No. 029-2002 Gold Rose Handicraft International 10 Chevelle St., South Fairview Quezon City Attention: Mr. Basilio M. Austria General Manager Gentlemen : This refers to your letter dated May 24, 2006 requesting that your export sales of handicrafts 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 4.106-5 of Revenue Regulations (RR) No. 16-2005 which took effect on November 1, 2005 subject export sales to zero percent (0%) rate, to wit: "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);" CAaSED Such being the case, your export sales of handicrafts 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 ascertained that the facts are different, then this ruling shall be considered as null and void. AaCTcI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service