Suspension of Operation of LOI No. 1409 (s. 1984) Re: Reopening of the Barter Trade in Zamboanga del Sur

May 12, 1988 VAT RULING NO. 158-88 103-000-00-158-88 Atty. Miguel Q. Baron 2560 Sunset Village Seaside Drive Cor. Roxas Blvd. Paraaque, Metro Manila S i r : This refers to your letter dated March 1, 1988 requesting a ruling on the applicability of the value-added tax on certain services offered by CHARTER HOUSE, INC. cdll In reply, please be informed that: 1. Room occupancy is subject to the percentage tax on operators of hotels under Section 113 of the National Internal Revenue Code, as amended by E.O. 273, hence exempt from VAT pursuant to Section (103(j) of the same Code; 2. Housekeeping for hotel guests, laundry/valet services are subject to VAT if they do not form part of the base of the percentage tax on room occupancy; 3. Sales of coffee shop and restaurant are subject to the percentage tax on caterers under Section 114 of the National Internal Revenue Code, as amended, by EO 273, hence exempt from VAT pursuant to Section 103(j) of the same Code; 4. Sales of gift shops are subject to VAT except the sale of newspapers and magazines which is exempt from VAT pursuant to Section 103(f) of the National Internal Revenue Code, as amended by EO 273; and 5. Telephone/telex services are subject to the percentage tax on franchise holders/or overseas communications tax under Sections 117 and 118 of the National Internal Revenue Code, as amended by EO 273, hence exempt from VAT pursuant to Section 103(j) of the same Code. Please be guided accordingly. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner