ADB's Request for Exemption from Percentage Tax on Hotel Accommodation, Food and Beverage Charges

January 30, 1985 BIR RULING NO. 012-85 205-A 129-84 012-85 Gentlemen : This refers to your letter dated January 26, 1985 relative to the request of the Asian Development Bank (ADB) for exemption from the percentage tax on hotel accommodation, food and beverage charges under Article 56 of the Agreement between ADB and the Government of the Republic of the Philippines. It is represented that the aforementioned expenses will be incurred in connection with the ADB-sponsored Conference on Privatization, Policies, Methods and Procedures which will be held at the Manila Hotel on January 30 to February 1, 1985. In reply, please be informed that this Office finds no legal basis to grant the request for the reason that the 12% hotel room occupancy tax, the 4% on food as well as the 8% tax on distilled spirits, fermented liquors and wines imposed by Sections 205-A and 206 of the Tax Code as amended by P.D. No. 1959 are taxes imposed on the proprietors, operators, or keepers of hotels, motels, rest houses, pension houses, lodging houses and resorts. In other words, the hotel room occupancy tax, the 4% tax on food as well as the 8% tax on distilled spirits, fermented liquors and wines are directly payable by said establishments. Therefore, the fact that said taxes may ultimately be shifted to or passed on to ADB will not constitute the same as tax payable by ADB for purposes of the exemption. cdtech Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner