VAT Ruling No. 018-02

March 26, 2002 VAT RULING NO. 018-02 108 (B) VAT #044-98 Tricom Systems (Philippines), Inc. 2/F, Metro House, 345 Sen. Gil Puyat Avenue Makati City Attention: Mr. Jose A. Medina Accounting Manager Gentlemen : This refers to your letter dated November 7, 2001 requesting that your transaction with Angelicum College, Inc., as a supplier of a PABX Telephone System, be exempt from the 10% VAT. It appears that Angelicum College, Inc. is claiming exemption from VAT on its local purchases of materials and equipment to be used actually, directly and exclusively for educational purposes. In reply, please be informed that the exemption granted to Angelicum College, Inc., if ever there is any, covers only the taxes for which it is directly liable, e.g., income tax. Since there is no showing that Angelicum College, Inc. is exempt from indirect tax, it cannot claim exemption from the 10% VAT being passed on by you as supplier of PABX Telephone System. VAT, being an indirect tax may be shifted or passed on to the buyer of goods, properties and services pursuant to Section 105 of the 1997 Tax Code. ( VAT Ruling No. 201-90, 119-90 and 005-00 ). Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group