Request for Cancellation of Client's Registration as VAT-Taxpayer and for Exemption from Paying VAT

August 27, 1998 BIR RULING NO. 123-98 236 (f)-000-00-123-98 Atty. Otilla Dimayuga-Molo 3/F Uni-Re Building 106 Paseo de Roxas, Makati City M a d a m : This refers to your letter dated March 23, 1998 stating that on April 24, 1997, your client, Mrs. Beatrice A. Dimayuga, registered with the BIR Office in Pasig her business of renting out her only property located at 20 Marylane Street, Kapitolyo, Pasig City; that at the time of the registration of her business, she did not realize that she was registered as a VAT-taxpayer; and that the total annual rental of her property covering the period from March to December 1997 is only P236,880.00 for which the corresponding creditable expanded withholding tax in the amount of P11,884.00 was withheld by the tenant. Based on the foregoing, you are requesting for the cancellation of your client's registration as a VAT-taxpayer to non-VAT taxpayer and exemption from paying the VAT for the period from March to December 1997. cdll In reply, please be informed that Section 4.107-6 of Revenue Regulations No. 7-95, as amended by Revenue Regulations No. 6-97, provides that a VAT-registered taxpayer whose gross sales or receipts did not exceed P500,000.00 during the first 12 months in business beginning the calendar year 1997 may apply for cancellation of registration by filing a duly accomplished Application for Cancellation of Registration (BIR Form 1557) with the Revenue District Officer concerned. However, Mrs. Beatrice A. Dimayuga is liable to value added tax from the time she registered as VAT Taxpayer up to the time of the cancellation of her VAT Registration. This will, therefore, serve as authority for the Revenue District Officer of Pasig City to approve your clients' Application for Cancellation of Registration (BIR Form No. 1557) as a VAT taxpayer to Non-VAT taxpayer. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue