VAT Ruling No. 003-90

January 4, 1990 VAT RULING NO. 003-90 Lagos Corporation Suite 220 Rufino Bldg. 6784 Ayala Ave. Makati Attention: Mr . Francisco Manasala Manager, Finance/Administration S i r s : This refers to your letter dated March 30, 1989, together with a memorandum of agreement which states that your services were engaged by J. Santos Construction and Management Services for the construction of four (4) units of concrete reinforced water reservoirs at the US Naval Station, Subic Bay. As represented your contractee has been awarded a subcontract work by Armacon Inc., a subcontractor of Anchortech which is the prime contractor of the said project. Based on the foregoing facts you now request for the approval of your application for zero rate of your subcontracting services to Armacon Inc. In reply, please be informed that your application for zero rate is disapproved since under Section 102(a)(3) of the Tax Code (as amended) and as implemented by Section 8(c)(2) of Revenue Regulations No. 5-87 effective zero rating on services rendered to US military facility is extended only to the prime contractor. Such being the case, your subcontracting services together with those rendered by other subcontractors of the main contractor are already subject to the 10% VAT. prll Very truly yours, JOSE U. ONG Commissioner of Internal Revenue