VAT Ruling No. 018-90

January 22, 1990 VAT RULING NO. 018-90 Farrales, Mendoza, Gonzales Quintos and Titong 4/F Suite 403, Erechem Bldg. Herrera corner Salcedo St. Legaspi Village, Makati Metro Manila Attention: Mr . Felix B . Reyes Jr . S i r s : This has reference to your letter dated October 18, 1989 requesting for a certification that your client, LUMINARY INTERNATIONAL, an EPZA registered enterprise is exempt from the value added tax on its (a) export sales and (b) purchases of materials used in the construction of its office and factory building in the zone. In reply, please be informed that the export sales of your client are exempt from VAT, however, if it is VAT-registered its export sales are zero-rated pursuant to Section 100(a) (1) of the Tax Code, as amended. However, the sale of construction materials made by suppliers from the customs territory to your client in the zone is subject to VAT. The tax exemption granted to merchandise in the zone is limited only to "raw materials, supplies, articles, equipment, machines, spare parts and wares of every description brought into the zone to be sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, graded, or otherwise processed, manipulated, manufactured, mixed with foreign or domestic merchandise whether directly or indirectly related in such activity". [Article 77(1) of Executive Order No. 226, The Omnibus Investment Code]. dctai Very truly yours, JOSE U. ONG Commissioner of Internal Revenue