VAT Ruling No. 014-92

February 12, 1992 VAT RULING NO. 014-92 NIRC Sec. 102 (a) (3) 106 (b) Precedent Ruling 067-91 Kalayaan Engineering Co., Inc. 4253 Emilia Street Makati, Metro Manila Attention: Mr. Victorino V. Lahoz Executive Vice-President Gentlemen : This has reference to your letter dated June 18, 1991 stating that your firm is a contracting company who has been doing business with Clark Air Base and the U.S. Navy since 1984; and that on May 4, 1988, you filed an application for zero rate, which was approved effective June 1, 1988. In view of the foregoing, you now request a ruling to the effect that despite such mentioned date in the approved application for zero-rate your transactions with said entities from January 1 to May 31, 1988 be subject to value-added tax at zero percent only pursuant to the R.P.-U.S. Military Bases Agreement of 1947 in relation to Section 102(a)(3) of the Tax Code. In reply, please be informed that Section 102(a)(3) of the Tax Code, as amended, provides that services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory are zero rated, shall be subject to VAT at zero percent. Such being the case, your request that services rendered to U.S. Military Bases from January 1 to May 31, 1988 be classified as effectively zero rated sale is hereby granted. If the intention, however, is to ask for tax credit/refund for the period in question (January 1 to May 31, 1988), it is informed that such right has obviously prescribed (Sec. 106(b)). CScTED Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue