Transfer of Tax Exemption Privileges of Marinduque Mining & Industrial Corp. to the Nonoc Mining & Industrial Corp.

May 29, 1989 VAT RULING NO. 116-89 Hi-Tech Manufacturing Corp. 26 Tandang Sora Ave. Quezon City Attention: Florence Gallardo Accountant S i r s : This refers to your letter dated January 18, 1989, inquiring if your company, which is a VAT-registered manufacturer of corrugated cartons and other packaging materials is subject to zero-rate on 1) its sale of goods to an exporter and 2) on its purchase of finished goods which will be sold in turn to BOI-registered exporters, which as represented, were given as export discount representing the 10% VAT. In reply, please be informed of the following: 1. Your sale of packaging materials to an exporter is subject to the payment of 10% value-added tax, regardless of whether the exporter is subject to or exempt from the VAT. However, if your sale is made to a BOI-registered firm exporting at least 70% of its total output, it is qualified for effective zero-rating under Sec. 2 of Rev. Reg. 2-88. 2. Your purchase of finished goods from any VAT registered supplier is not qualified for zero-rating but is subject to 10% VAT which you can claim as an input tax against the output tax of your domestic sale of finished goods to any BOI or non-BOI-registered exporter. acITSD Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue