VAT Ruling No. 030-89

January 12, 1989 VAT RULING NO. 030-89 Mr. Rolando Arrivillaga Resident Representative World Bank Mission Rm. 200 Central Bank of the Phil. Manila S i r : This is in reply to your letter dated November 14, 1988 where you stated that as World Bank Resident Representative, you have been using your residence telephone line for official calls since November, 1986. This telephone line, however is not registered under the name of the World Bank, but under the name of your landlord, Mr. Feliciano Miravite. To exempt said telephone from the 10% tax on overseas calls the Philippine Long Distance Telephone Company has required you to get a certification from this Office exempting the World Bank from the 10% tax on outgoing overseas telephone calls. cdti In this regard, please be informed of the following: a. Pursuant to Section 103(u) of the National Internal Revenue Code (NIRC), as amended by Executive Order No. 273, communication services are exempt from the Value-Added Tax. The 10% tax on outgoing overseas calls (Section 118 of the said code) is different from the 10% VAT levied on the sale of goods and services. b. Pursuant to Section 118 (b) (iii) of the same code, the World Bank is exempt from the 10% tax on outgoing overseas telephone calls, to wit: "(b) Exemption. the tax imposed by this Section shall not apply to: xxx xxx xxx (iii) International Organizations Amount paid for messages transmitted by a public international organization or any of its agencies based in the Philippines enjoying privileges, exemptions and immunities which the Government of the Philippines is committed to recognize pursuant to an international agreement." This ruling serves as a certificate exempting the World Bank from the 10% tax on overseas dispatch, message or conversation originating from the Philippines provided that proof is shown that calls emanating from residential telephone lines which involve transactions with World Bank, are official in nature and therefore covered by the exemption. aisadc Please be guided accordingly. Very truly yours, EUFRACIO D. SANTOS Deputy Commissioner