VAT Ruling No. 007-96

May 14, 1996 VAT RULING NO. 007-96 Section 99-000-007 Commercial Heartland, Inc. 10 Calle Obrero, Bagumbayan Quezon City Attention: Ms . Editha De Guzman Gentlemen : This refers to your letter dated January 15, 1996, requesting confirmation of your opinion that as a lessor of real property, you can shift or pass on the ten percent (10%) value-added tax to your lessee/s in accordance with the provisions of the second paragraph of Section 99 of the Tax Code, as amended by R.A. 7716 which provides, viz: "SEC. 99. Persons Liable . . . The Value-Added Tax is an indirect tax and that amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. This rule shall likewise apply to existing contracts of sale or lease of goods, properties or services at the time of the effectivity of this Act." xxx xxx xxx In reply, please be informed that as lessor of real property whose gross receipts exceed the threshold of P500,000.00 you are subject to the 10% value-added tax prescribed in Section 102 of the Tax Code, as amended by R.A. 7716. Accordingly, the 10% VAT may be passed on or shifted to the lessee/s in accordance with the terms and conditions of the lease contract. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue