VAT Ruling No. 002-01

February 12, 2001 VAT RULING NO. 002-01 RMC 74-99 010-00 Webserv Asia Corporation 1102 B PSE Center West Tower Exchange Road, Pasig City Attention: Mr . Michael U . Kho Director Gentlemen : This refers to your letter dated October 10, 2000, requesting for a BIR certification to the effect that indeed Webserv Asia Corporation (WAC), a PEZA-registered ecozone export enterprise with Registration Certificate No. 00-0071 dated September 6, 2000, is a zero-percent (0%) VAT entity; this because your service contractors and suppliers require the same from you. In reply, please be informed that Section 3(3) of Revenue Memorandum Circular No. 74-99 provides that "any sale of goods, property or services made by a VAT-registered supplier from the Customs Territory to any registered enterprise operating in the ecozone, regardless of the class or type of the latter's PEZA registration, is actually qualified and thus legally entitled to the zero percent (0%) VAT." Moreover, said RMC 74-99 "shall serve as a sufficient basis to entitle such supplier of goods, property or services to the benefit of the zero percent (0%) VAT for sales made to the afore-mentioned ecozone enterprises and shall serve as sufficient compliance to the requirement for prior approval of zero-rating imposed by RR 7-95 ." (Emphasis supplied.) Additionally, the said supplier should imprint on its duly registered VAT invoice the word "zero-rated" covering such zero-rated sales pursuant to Sec. 4.108-1 of Revenue Regulations No. 7-95. Although WAC is indeed within the purview of the aforementioned provisions based on the foregoing facts as represented, there is no need for the BIR to issue a certification therefor; otherwise, such issuance would defeat the very purpose of RMC 74-99 of doing away with the tedious requirement of prior application and approval of effectively zero-rating as imposed by RR 7-95. Very truly yours, Commissioner of Internal Revenue By: (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal and Inspection Group