VAT Ruling No. 027-97

April 1, 1997 VAT RULING NO. 027-97 102; 000; 027-97 Philippine Science High School Agham Road, Diliman, Quezon City Attention: Dr . Vicenta F . Reyes Director IV M a d a m : This refers to your letter dated August 5, 1996 wherein you requested a ruling on whether or not the payments of progress billings to the architects or project consultants of the Philippine Science High School is subject to the value added tax. It is the opinion of your accountant that the services of architects are subject to VAT since they are considered as contractors. prcd In reply, please be informed professional services shall be subject to the value added tax only beginning January 1, 1998 in accordance with Republic Act No. 8241 amending Republic Act No. 7716 as follows: "SEC. 17. Effectivity of the VAT on Certain Goods, Properties, and Services . The value added tax shall be levied, assessed and collected on the following transactions starting January 1, 1998: (a) Services performed in the exercise of profession or calling subject to the professional tax under the Local Government Code or Republic Act No. 7160, and professional services performed by registered professional partnerships; actors, actresses, talents, singers and emcees; radio and television broadcasters, choreographers, musical, radio, movie, television and stage directors; and professional athletes;" xxx xxx xxx Furthermore, an examination of your contract for architectural services reveals that such services are limited only to activities commonly and generally performed by a professional architect i.e.,drafting of plans and designs including supervision of the project. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be null and void. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue