Suspension of Imposition of Increased Tax on Winnings in Horse Races and Jai Alai

April 3, 1989 VAT RULING NO. 081-89 Meralco Transit Organization, Inc. LRTA Compound, Aurora Blvd. Pasay City, Metro Manila Attention: Victor C . Risma, Jr . Executive Vice President S i r s : This has reference to your letter dated September 28, 1988 seeking clarification of VAT Ruling No. 102-000-00-179-88 dated May 28, 1988, specifically the reply to Question No. 2 which states: ". . . since Meralco Transit Organization (METRO) will be liable for the VAT on receipts or reimbursements, it should include the VAT." In reply, please be informed that since the reimbursement for operating expenses incurred by Metro form part of its gross receipts they are subject to VAT which as an indirect tax, can be passed on the LRTA. However, the receipt of such reimbursement expenses is not considered income of METRO because the company merely facilitates for LRTA the disbursements of operating expenses. In order that METRO's receipts for reimbursable expenses will not be considered part of METRO's income which is subject to VAT, all invoices for said expenses must be in the name of LRTA. Please be guided accordingly. Very truly yours, EUFRACIO D. SANTOS Deputy Commissioner