A Security Agency is Subject to 10% Value-added-tax

November 6, 1987 BIR RULING NO. 351-87 102 000-00 351-87 Gentlemen : This refers to your letter dated October 27, 1987, requesting in behalf of more than 380 private Security Agencies who are all members of that Association a ruling as to whether or not said agencies are subject to the value-added-tax law imposed under Executive Order No. 273. aisadc In reply, please be informed that Section 102(a) of the Tax Code as amended by Executive Order No. 273 provides that there shall be levied, assessed and collected a value-added-tax equivalent to 10% of the gross receipts derived by any person engaged in the sale of services. The only services which are exempt from the value-added-tax are those rendered by persons subject to the percentage tax under Title V, i.e., those enumerated in Sections 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124 and those who are exempt under Section 103(w) who have not opted to be VAT registered (Section 112). (Rev. Regs. No. 5-87). Inasmuch as a security agency is not included among those enumerated as exempt services, it is subject to the 10% value-added-tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner