ITAD BIR Ruling No. 306-14

October 16, 2014 ITAD BIR RULING NO. 306-14 Article 34, Vienna Convention Section 6, RMC No. 40-2007 AECOM International Development 8th Floor, Sterling Centre Building 131 Dela Rosa St. Makati City 1229 Attention: Ms. Lisa Kircher Lumbao Deputy Chief of Party USAID Contractor Gentlemen : This refers to your letter dated 18 August 2014 requesting for a BIR Ruling confirming that your agency, AECOM INTERNATIONAL DEVELOPMENT (AECOM), as implementing agent of the United States Agency for International Development (USAID) for the Be Secure Project, is exempt from value-added tax (VAT) on the telecommunication services provided by the PLDT. It is represented that AECOM has an office located at the 8th Floor of the Sterling Centre Building of Makati used exclusively for the Be Secure Project; that the telephone and internet lines installed in the Be Secure Project office are exclusively used for the work that AECOM undertakes for USAID to implement the Be Secure Project. In reply, please be informed that with the issuance by the Bureau of Internal Revenue (BIR) of BIR Certification No. 2013-070 with validity until December 17, 2014, it has recognized AECOM as implementing agency of the USAID for its development assistance activity Be Secure Project (Water Security Resilient Economic Growth and Stability) . As such, the BIR has confirmed that AECOM's purchase of goods and services used exclusively for the Be Secure Project are subject to VAT at zero percent (0%) rate, subject to the issuance of appropriate invoice or receipt, review and audit by any USAID and/or BIR representatives, and compliance with other terms and conditions laid down in Revenue Memorandum Circular (RMC) No. 40-2007. Accordingly, since AECOM's purchase of goods and services used exclusively for the BE Secure Project are subject to VAT at zero percent (0%) rate, this Office is of the opinion and as it hereby holds that the telecommunication services by AECOM from PLDT, used exclusively for the Be Secure project of the USAID, are subject to VAT at zero percent (0%) rate. In relation thereto, please note that all sales to USAID's Implementing Agents by VAT-registered sellers must be issued a VAT invoice or an official receipt for each sale which contains the following information: a. Name of the seller and a statement that he or it is a VAT-registered person followed by his or its Tax Identification Number (TIN); b. Name and address of the Implementing Agent, together with the words, "USAID, by X Co., the Implementing Agent for (Name of Program/Project)"; DCAEcS c. Current and valid VAT Exemption Certificate Number of USAID; d. The total amount which the purchaser pays or is obliged to pay to the seller, Provided, that i. The amount of the VAT shall be shown as a separate item in the invoice or receipt; or ii. The term "ZERO RATED SALE", as appropriate, is written or printed prominently on the face of the invoice/receipt. e. The date of transaction, quantity, unit cost and description of the goods or properties or nature of the services. This ruling is issued on the basis of the facts as represented. However, if upon investigation it shall be disclosed that the actual facts are different, then this ruling shall be without force and effect insofar as the herein party is concerned. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner Bureau of Internal Revenue