Payment of DST Before Release of VAT Certificate of Registration

April 22, 1994 BIR RULING NO. 098-94 107 000-00 098-94 PME Services Phils., Inc. Poblacion, Bauan Batangas Attention: Mr . Leovino P . Maniego President Gentlemen : This refers to your letter dated March 18, 1994, stating that you are a joint venture organization of Singaporean and Filipino entrepreneurs with office address at Poblacion, Bauan, Batangas; that you have an authorized capital stock in the amount of P21,412,500.00 of which 25% thereof or P5,355,125.00 has been actually subscribed and P2,944,218.75 paid; that your Certificate of Registration of Business Name and as Withholding Agent (W-5) have been released by the Revenue District Officer of Batangas City but your Value-Added Tax Certificate of Registration is being held in abeyance unless you pay first the amount of P25,025.85 as documentary stamp tax corresponding to the paid-up subscription of P2,944,218.75. On the basis of the foregoing, you are requesting clarification as to whether you should pay the aforesaid amount of P25,025.85 before your VAT Certificate of Registration is released to you by the Revenue District Officer of Batangas City. In reply, please be informed that under Section 107 of the Tax Code, any person subject to the value-added tax under Sections 100 and 102 thereof are required to register with the appropriate Revenue District Office. (Sec. 18, Revenue Regulations No. 5-87) The taxpayer's obligation to register shall arise upon commencement of business which means conducting commercial activity with the intention of making profits. Such being the case, the refusal of the Revenue District Officer concerned to release your VAT certificate of registration on the ground that you have not paid the documentary stamp tax on the paid-up capital is utterly baseless since you have already a corporate existence and juridical personality from the date of your registration with the Securities and Exchange Commission (SEC) on December 3, 1993. cdta This will serve as your authority to secure the release of your VAT registration certificate from the Revenue District Officer of Batangas City. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner Officer-in-Charge