VAT at 0% on Income Received Amerop (Phils.), Inc.

August 17, 1989 BIR RULING NO. 174-89 102 (a) (2) 000-00 174-89 Gentlemen : This refers to your letter dated June 19, 1989 requesting confirmation of your opinion that the income received by your client, Amerop (Phils.), Inc., for services rendered to Westway Commercial Corporation is subject to the value-added tax at 0%. cdtech It is represented that the services of Amerop consist essentially of soliciting suppliers to cater to Westway's needs mostly sugar; that for services rendered, Amerop is paid by Westway service fee in US dollars which are inwardly remitted to the former's dollar accounts in the Philippines; and that Amerop subsequently sells the said dollars into Philippine pesos through authorized agent banks. In reply, please be informed that on the basis of the foregoing representation, your opinion is confirmed. The services of your client which are paid for in acceptable foreign currency remitted to the Philippines in accordance with the rules and regulations of the Central Bank of the Philippines are subject to the value-added tax at 0% pursuant to Section 102(a)(2) of the Tax Code, as amended by Executive Order No. 273 and as amplified by Revenue Regulations No. 5-87.However, Amerop is still required to register as a VAT-registered person pursuant to Section 107 of the same Code. Upon approval of your client's applications, its billings to Westway need not include the value-added tax. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner