Whether NIA Could Apply as a VAT Registered Corporation

April 13, 1994 BIR RULING NO. 096-94 101 (a) 000-00 096-94 Mr. Maximino A. Eclipse Assistant Administrator for Administrative Services National Irrigation Administration EDSA, Quezon City S i r : This refers to your letter dated August 3, 1993 stating that National Irrigation Administration (NIA) is a government owned and controlled corporation; that it imports various construction equipment/materials and supplies out of the proceeds of loans from IBRD, ADB, and OECF and that NIA pays 10% VAT whenever the imported goods are released from the Bureau of Customs. On the basis of the foregoing facts, you want to seek our opinion if NIA could apply as a VAT registered corporation. In reply, please be informed that, although NIA is subject to VAT on its importations of goods pursuant to Section 101(a) of the Tax Code, it is not allowed by law to register as a VAT registered entity because it is an agency of the government that is not engaged in VAT taxable activity/transaction in the ordinary course of business. Under Section 107 of the Tax Code, only those persons subject to the value-added tax under Sections 100 and 102 of the Tax Code shall register with the appropriate Revenue District Officer. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue