Whether Insurance Companies are Subject to the Value-Added Tax (VAT)

April 11, 1994 BIR RULING NO. 093-94 121 103 (j) 000-00 093-94 Oriental Assurance Corporation 2/F OAC Building San Miguel Avenue Pasig, Metro Manila Attention: Ms . Luz N . Catoco Senior Vice-President and General Manager Gentlemen : This refers to your letter dated February 14, 1994, requesting for clarification as to whether insurance companies are subject to the value-added tax (VAT). In reply, please be informed that since insurance companies are subject to the 5% tax based on gross premiums collected pursuant to Section 121 of the Tax Code, they are exempt from VAT in accordance with Section 103(j) of the same Code. Accordingly, you should register as a Non-VAT taxpayer at the Revenue District Office where your place of business or principal office is located in accordance with Revenue Regulations No. 6-88. As a Non-VAT taxpayer, you are exempt from VAT on gross receipts/premiums derived from insurance business; but you cannot prevent the seller from shifting the VAT to you by way of added cost to your purchases of goods or services. cdt Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue