Applicability of VAT on Payments for Janitorial Services

March 22, 1988 BIR RULING NO. 115-88 103 (10) 000-00 115-88 Gentlemen : This refers to your note dated February 9, 1988 requesting a ruling on the applicability of the value-added tax on your payments for janitorial services to Moonchild Services. In reply, please be informed that pursuant to Section 100 of the Tax Code, your payments to Moonchild Services for janitorial services are subject to the value-added tax of 10% if the gross receipts of said janitorial agency exceed P200,000.00 for the 12-month period. If its gross receipts do not exceed P200,000.00 during any 12-month period and Moonchild Services is not registered as a VAT-entity, it is only subject to a tax equivalent to 2% of its gross quarterly sales or receipts pursuant to Sections 112 and 103(w) of the Tax Code, as amended, as amplified by Section 9(b)(18) of Revenue Regulations No. 5-87.However, if its gross receipts is less than P200,000.00 but opts to register as a VAT-entity pursuant to Section 107(d) of the Tax Code, as amended, it is subject to the value-added tax of 10%. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner