VAT Ruling No. 029-89

February 22, 1989 VAT RULING NO. 029-89 Ms. Purita N. Espinosa 44 Congressional Avenue Quezon City M a d a m : This has reference to your letter dated November 23, 1988 requesting clarification on the applicability of the value-added tax (VAT) on the janitorial and manpower services rendered by your company to your clients who are VAT-exempt because they are either franchise holders or non-profit organizations. In reply, please be informed that only the businesses/transactions which are specifically enumerated under Sec. 103 of the Tax Code, as amended by Executive Order No. 273, are exempt from VAT. Since your business is not among those listed in the said Section, you are not exempt from VAT even if your clients are VAT-exempt. However, since such clients' exemption is limited only to taxes they are directly liable to pay and the VAT is an indirect tax which may be passed on, you may incorporate the tax into the contract price. Please be guided accordingly. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue