VAT or Any Other Percentage Tax on Gross Receipts from Operating Billiards

December 8, 1988 BIR RULING NO. 574-88 107 112-88 574-88 Gentlemen : This refers to your letter dated November 17, 1988 stating that you are one of those engaged in the promotion of sports, particularly billiard which has already produced Filipino champions who are recognized internationally; that your billiard tables are located within the premises of your bowling centers; that like golf, a billiard player pays an hourly fee to play billiards; and that you do not charge any admission fee. You now request information whether you are liable to the value-added tax or any other percentage tax on gross receipts from operating billiards if (a) the billiards are open to the public; and (2) the billiards are available only to members of a private membership club. In reply, please be informed that the value-added tax is imposed on any person who, in the course of trade or business, sells, barters or exchanges goods, renders services, or engages in similar transaction or import goods. ("Section 99, Tax Code as amended by Executive Order No. 273) Since billiard is a sport and not a business enterprise, you are not subject to the value-added tax imposed under Section 100 of the Tax Code, as amended, whether your billiards are open to the public or available only to members of a private membership club. Likewise, your gross receipts derived from operating billiards are not subject to any percentage tax (amusement) tax since billiard is not one of the activities mentioned in Section 123 of the Tax Code. However, you are subject to the corporate income tax prescribed under Section 24(a) of the same Code. cdti Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner