Bureau of Local Government Finance Opinion

August 4, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Napoleon G. Go President NGC Management Services 250 Ibuna Street San Juan, Metro Manila S i r : This refers to your letter dated October 3, 1997 to the Department of the Interior and Local Government which was forwarded to this Bureau for appropriate action. In this connection, it is informed that as a matter of policy, this Bureau does not express official views on hypothetical queries. At any rate, the following views are for information purposes only. If as represented that the Manufacturer's Sales Office is located at B-City and all sales are done in said city, the applicable provision of law is Article 243(b)(1) of the Implementing Rules and Regulations (IRR) implementing Section 150 of the Local Government Code (LGC) of 1991, quoted as follows: "ART. 243. Situs of the Tax . . . . "(b) Sales Allocation (1) All sales made in a locality where there is a branch or sales office or warehouse shall be recorded in said branch or sales office or warehouse and the tax shall be payable to the city or municipality where the same is located." In view of the aforequoted provision of the law, it may be stated that all sales made in the Manufacturer's Sales Office in B-City shall be recorded thereat and shall be 100% taxable by said city. The 70%-30% allocation is only applicable in cases where there is a factory, project office, plant or plantation in the pursuit of business. Thirty percent (30%) of all sales recorded in the principal office shall be taxable by the city or municipality where the principal office is located and seventy percent (70%) of all sales recorded in the principal office shall be taxable by the city or municipality where the factory, project office, plant or plantation is located. HEScID It is hoped that this will help clarify matters. Very truly yours, (SGD.) ANGELINA M. MAGSINO (Deputy Executive Director) Officer-in-Charge