BIR Ruling No. 033-12

January 17, 2012 BIR RULING NO. 033-12 Section 2 (r), Revenue Bulletin No. 01-03; 000-00 HNR Pacific Industries, Inc. 1387 Camarin Road, Caloocan City Attention: Nathaniel Isip Managing Director Gentlemen : This refers to your letter dated 14 September 2011, requesting for a legal opinion on the VAT exemption of a Garment Subcontractor primarily intended for export. SDaHEc The facts as represented are as follows: HNR Pacific Industries, Inc. (HPII) was registered with the Bureau of Internal Revenue on December 4, 2002 and was issued a Certificate of Registration No. 4RC0000162624; that all internal revenue taxes from inception and onward were allegedly religiously paid by HPII; that the BIR Regional Office had been "continually assessing" HPII deficiency tax on VAT until HPII noticed that all related transactions are allegedly considered Zero-Rated or VAT Exempt Sale; that before reacting or responding to such "assessment", HPII would like to know whether the services of a garment subcontractor primarily intended for export are exempt not only from VAT but also from income tax. In reply, please be informed that this Office cannot issue a determinative ruling on the above matter considering that the issue is now subject to an on-going audit, which is considered as a "No-Ruling Area" pursuant to Section 2 (r) of Revenue Bulletin 01-03. (BIR Ruling No. DA-394-04 dated July 21, 2004) Section 2 (r) of Revenue Bulletin 01-03 provides: DcTaEH "SECTION 2. List of No-Ruling Areas. The following shall hereby be construed and identified as "No-Ruling Areas": r) Issue/s or transactions involving directly or indirectly the same taxpayer/s which is/are the subject of an investigation, on-going audit, administrative protest, claim for refund or issuance of tax credit certificate, collection proceedings, or a judicial appeal subject to Section 3 hereunder. Accordingly, the taxpayer must submit and include the following statement in the request for ruling: "The issue/s or transaction subject of the request is not under investigation, on-going audit, administrative protest, claim for refund or issuance of a tax credit certificate, collection proceedings, or a judicial appeal of the taxpayer/s involved." Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue