VAT Ruling No. 006-92

January 20, 1992 VAT RULING NO. 006-92 NIRC Sec. 102 (a) Precedent Ruling 000-00 Morning Sun Realty Corp. Rm. 308 Borja Bldg. Sta. Cruz Manila Attention: Mr. Ronaldo R. Cruz S i r : This refers to your letter dated October 26, 1990 requesting for a ruling as to the internal revenue tax applicable to your business of exhibiting cinematographic films. Moreover, you would like to be informed of the place where you will register your business; where to secure your (VAT or Non-VAT) registration number; and where to remit your tax payments. It is represented that you are a registered corporation engaged in the exhibition of films on a double showing basis; and that your movie house is in the province while your office is in Quezon City. In reply, please be informed that as the exhibitor of cinematographic films (in other words, movie operator), you are subject to amusement tax on your gross receipts derived from admission tickets pursuant to Section 13 of the Local Tax Code. With respect to your gross receipts from showing advertisement films, the same, is in effect, your consideration for the use of your moviehouse facilities to advertise your client; hence, subject to VAT under Section 102(a) of the Tax Code. Accordingly, if you regularly show advertisement films for a consideration, you should register as a VAT taxpayer in Quezon City where your main office is located. Otherwise, if your activity consists solely in showing cinematographic films without any advertisement clips, you should register as a Non-VAT taxpayer in the revenue district where your moviehouse is located pursuant to Section 237 of the Tax Code. As a VAT taxpayer, for showing advertising clips for a consideration, you should file a quarterly return of your gross receipts and pay the tax thereon to a bank duly accredited by the Commissioner located in the revenue district of Quezon City where you are required to register, pursuant to Section 110 of the Tax Code. But if your gross receipts is derived solely from showing regular cinematographic films, since you are only subject to amusement tax under the Local Tax Code, you should pay your amusement tax liability to the municipality where your moviehouse is located. This supersedes the provisions of Revenue Memorandum Circular No. 8-88 which are inconsistent with this ruling. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue