VAT Ruling No. 014-90

January 22, 1990 VAT RULING NO. 014-90 104-000-00-014-90 Nu-Kane International, Inc. Lipolo, Mandaue City Cebu Attention: Ms . Edwina dela Cerna Accountant Gentlemen : This refers to your letter inquiry dated April 26, 1989 wherein you represented that your are engaged in the manufacture of "rattan" furnitures for export, thus subject to zero percent (0%) value added tax if such activity is VAT registered. As such, your inquiry is, whether you can purchase materials and services from VAT-registered persons without the 10% value added tax being passed-on to you, and if such is legally possible, what are the procedures to avail of such privilege. In reply, please be informed that your purchases of goods and services are subject to 10% VAT, pursuant to Sec. 100 and 102, respectively of the Tax Code, as amended by E.O. 273. The VAT, being an indirect tax may be passed on to you and shall be available to you and to be taken up in your books of accounts as Input Tax Credit (Sec. 104, NIRC). Such amount of input tax attributable to your export sales may, however, be tax credited or refunded to you by this Office, subject to the following conditions: (1) A claim for refund or tax credit is filed with this Office within two years from date of the exportation; (2) Proof/evidence that the foreign exchange proceeds of the export sale/s has been inwardly remitted to the Philippines and accounted for in accordance with the regulations of the Central Bank of the Philippines; and (3) The amount of input tax attributable to goods exported has not been previously applied/credited against your output tax due on your local sales [Sec. 106(a), NIRC.] LLjur Very truly yours, JOSE U. ONG Commissioner of Internal Revenue