VAT Ruling No. 002-05

February 28, 2005 VAT RULING NO. 002-05 108 (b) 054-03 Swissport Philippines, Inc. Rm. 406, 4/F IPT Building, NAIA Pasay City Attention: Ms. Ruth Magpile Finance Officer Gentlemen : This refers to your letter dated August 9, 2004 stating that Swissport Philippines, Inc. (Swissport) is a newly organized domestic corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CS200308977 dated April 15, 2003; that it is based at the Ninoy Aquino International Airport; that Swissport operates as a passenger and cargo service exporter catering to such international carriers as Continental Micronesia Airline, Kuwait Airways, Federal Express, Qantas Airways and Asiana Airlines; that Swissport provides cargo handling services ranging from export cargo acceptance, cargo crating, cargo checking and reweighing, towing out/delivery of cargo to the plane side and temporary warehousing; and that Swissport likewise do passenger and ramp handling services which include but not limited to passenger and baggage check-in, passenger profiling, cargo loading and unloading, load planning, aircraft towing and servicing, cabin cleaning and lost and found services. Based on the foregoing representations, you now request for confirmation of your opinion that the ground handling services rendered to international carriers are subject to zero-rated value-added tax. 2005cdtai In reply thereto, please be informed that in VAT Ruling No. 054-03 dated December 15, 2003, this Office had already the occasion to rule on the matter, when it said that ". . . such services fall under Section 108(B) of the Tax Code of 1997, as implemented by Section 3(b) of Revenue Regulations No. 7-95, as amended by Revenue Regulations No. 5-96, relating to "services rendered to vessels engaged exclusively in international shipping" pursuant to the doctrine of ejusdem generis in Statutory Construction. Accordingly, they shall be treated as entitled to the zero percent (0%) VAT." Considering that the above-cited case is in all fours similar to the instant case, this Office holds that services rendered by Swissport to the international carriers shall be subject to zero percent (0%) VAT as prescribed in Section 108(B) of the Tax Code of 1997. DaTICc This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group