VAT Exemption in the Business of Engaging in the Promotion and Development of Gymnastics

May 11, 1988 BIR RULING NO. 204-88 99 112-88 204-88 Gentlemen : This refers to your letter dated April 15, 1988 requesting a ruling that your client, CLUB GYMNASTICA, INC., is not subject to the value-added tax. It is represented that your client is engaged in the promotion and development of gymnastics as a sport; that since its organization in 1981, it contributed immensely to the national sports development program; that it is assisting the Philippine Olympic Committee and New Project: Gintong Alay in the promotion and development of the sports of gymnastics; and that Gintong Alay has represented to this Office that your client is maintaining a year-round gymnastics training program at the National Gymnastics Training Center, Rizal Provincial Capitol Compound, Shaw Blvd., Pasig, Metro Manila. In reply, please be informed that under the foregoing facts, gymnastics is a sport and, therefore, not a business enterprise; hence, your client for engaging in the promotion and development of gymnastics is not subject to the value-added tax imposed by Section 99 of the Tax Code as amended by Executive Order No. 273. (BIR Ruling No. 112-88) However, it should be emphasized that your client is still subject to the corporate income tax imposed by Section 24(a) of the Tax Code. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner