VAT Ruling No. 018-89

January 25, 1989 VAT RULING NO. 018-89 Cultural Center of the Philippines Roxas Blvd., Metro Manila Attention: Ms . Jennifer G . Concepcion Asst . Vice President Finance/Comptroller M a d a m : This has reference to your letter dated September 6, 1988 requesting clarification regarding the applicability of the Value-Added Tax (VAT) on the following income generated by the Center. casia (1) Ticket sales from cultural shows (produced and/or co-produced); (2) Venue rentals collected from lessees for the use of its theaters; (3) Concessions rental collected from concessionaires using its space and/or facilities; and (4) Sale of goods from its gift shop. Likewise, you are inquiring about the proper basis of the expanded withholding tax from billings emanating from VAT-registered contractors. In reply thereto, please be informed that: (1) Ticket sales from cultural shows are not subject to VAT since the sale of tickets does not fall under the definition of goods and services pursuant to Section 2 of Revenue Regulations No. 5-87. (2) Rentals from lessees for the use of theaters as well as rentals collected from concessionaires of space or facilities are exempt from VAT pursuant to Sec. 103 (q) of the Tax Code, as amended by Executive Order No. 273. (3) Sale of goods from gift shops is subject to VAT. However, if the annual gross sales do not exceed P200,000 for a twelve month period, it is subject to the 2% tax on the amount of gross annual sales pursuant to Sec. 112 of the same Code unless the seller has opted to register as a VAT taxpayer. Lastly, the basis of the 1% expanded withholding tax is the amount billed net of VAT pursuant to VAT Ruling No. 175-88 dated May 20, 1988 (a copy of which is hereto attached). This modifies BIR Law Division Ruling No. 564-88 (dated November 29, 1988). Please be guided accordingly. cd Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner