Exemption from the 10% Value-Added Tax

March 20, 1989 BIR RULING NO. 040-89 102 (a); 103 (r) 000-00 040-89 S i r : This refers to your letter dated February 28, 1989 requesting confirmation of your opinion that insurance agents or sub-agents who are natural persons or individuals subject to the occupation tax as such are exempt from the value-added tax as long as they have paid their occupation tax. In reply, please be informed that this Office hereby confirms your opinion. It is noted that among the services which are exempt from the value-added tax are those performed in the exercise of profession or calling (except customs broker) subject to the occupation tax under the Local Tax Code. (Section 103(r), Tax Code as amended by Executive Order No. 273) Under Section 12(a) of P.D. No. 231 otherwise known as the Local Tax Code, insurance agents and sub-agents are among those subject to the occupation tax of P75.00. Such being the case, their gross receipts derived from the exercise of their profession or calling as insurance agents or sub-agents are not subject to the 10% value-added tax imposed by Section 102(a) of the Tax Code, as amended. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner