E.M. Paule Construction & Trading

May 20, 2009 BIR RULING [SH-(043) 325-09] Section 22 (B); DA-047-2004 E.M. Paule Construction & Trading #40 Payna St., Veteran Village Project 7, Quezon City Attention: Ma. Victoria C. Gonzales Project Coordinator Gentlemen : This refers to your letter dated November 19, 2008, requesting exemption from value-added tax (VAT) of your services for construction and development of the Karangalan Medium Rise Housing Project Site I-B, Brgy. Manggahan, Pasig City, pursuant to Republic Act No. 7279, otherwise known as "Urban Development and Housing Act of 1992". Documents submitted disclosed that E.M. PAULE CONSTRUCTION AND TRADING, was awarded the highest bidder by the National Housing Authority (NHA) in a public bidding for the completion of the terminated works of Karangalan Medium Housing Project Site I-B, Brgy. Manggahan, Pasig City; and that the said project would include the supply of construction materials, labor and equipment for the completion of the project. Hence, your request. In reply, please be informed that under Sec. 109 (P) of the Tax Code of 1997 in relation with Sec. 20 (d) (3) of Republic Act No. 7279, the contractor of the socialized housing project is exempt from the payment of VAT. However, purchases of goods/articles by the project contractor shall be subject to VAT, even if the said purchases are to be used for the socialized housing project. 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. ASEcHI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service