VAT Ruling No. 026-03

April 9, 2003 VAT RULING NO. 026-03 Sec. 107 000-00 A-1 Network Brokerage, Inc. 3/F Delgado Building 637 A. Bonifacio Drive Port Area, Manila Attention: Ms. Maria Theresa B. Santos Team Leader Operations Gentlemen : In reply to your letter dated March 14, 2003 requesting for a ruling exempting your client, Fil-am Foods, Inc., a non-VAT registered company, from the payment of VAT on its importation of machineries for use in its business, please be informed that under Section 107 of the Tax Code of 1997, importation of goods ( which includes machineries ), is subject to the 10% VAT based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such tax to be paid by the importer ( regardless of whether or not the importer is VAT-registered or non-VAT registered ), prior to the release of such goods from customs custody. In view thereof, your request for exemption from VAT on the subject importation is hereby denied for lack of legal basis. Very truly yours, (SGD.) GUILLERMO L. PARAYNO, JR. Commissioner of Internal Revenue