Republic Act No. 7649, as Implemented by Revenue Regulations No. 10-93, Requiring the Withholding of Creditable Value-Added Tax, Took Effect on July 1, 1993, and Applies only to Income Payments Made After Said Date

January 6, 1994 BIR RULING NO. 010-94 102 000-00 010-94 Cordillera Greeners Livelihood Association, Inc. Taytay, Palawan Attention: Mr . Eufemio E . Ubay President/Chairman Gentlemen : In reply to your letter dated October 27, 1993, please be informed that Republic Act No. 7649, as implemented by Revenue Regulations No. 10-93, requiring the withholding of creditable value-added tax, took effect on July 1, 1993, and applies only to income payments made after said date. Moreover, the 3% contractor's tax has long been replaced by the 10% value-added tax imposed under Section 102 of the Tax Code as amended by Executive Order No. 273 effective January 1, 1988. Accordingly, the collections and/or withholding of the 3% contractor's tax on the billings submitted in December, 1992 and March, 1993 but actually paid by the Department of Environment and Natural Resources (DENR) in January, 1993 and June, 1993, respectively, are without legal basis. However, income payments made subsequent to July 1, 1993 (effectivity of R.A. 7649) for sale of services shall be subject to the withholding of 6% creditable value-added tax (VAT) regardless of whether the underlying contract was entered into before or after July 1, 1993. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue