VAT Ruling No. 033-00

September 8, 2000 VAT RULING NO. 033-00 Sec. 106 (A) (2) (c) 000-00 Asian Development Bank (ADB) 6 ADB Avenue Mandaluyong City Attention: Mr . Normin S . Pakpahan Manager General Services Division Gentlemen : This refers to your letter dated January 17, 2000 requesting for the issuance or revalidation of ADB's exemption for the payment of value-added tax as per certification issued by this Office in November 1989. It is represented that because the said certification was issued ten years ago. ADB is encountering instances wherein the Bureau of Customs and other government agencies question the validity of said certificate; and that Section 34 of the Headquarter's Agreement states that "The Bank, its property and its operations and transactions shall be exempt from (a) all taxation and any obligation for the payment, withholding or collection of any tax or duty intended for the official use of the Bank." ACETSa In reply, please be informed that direct sales of goods and services to Asian Development Bank remain effectively zero-rated under Sections 106(A)(2)(c) and 108(B)(3) of the Tax Code of 1997. Thus, the certification issued to you dated November 29, 1989 is still valid and effective. This certification shall be deemed as sufficient compliance of your local suppliers with the requirement of prior approval for effective zero-rating as prescribed under Section 4.107-1(d) of Revenue Regulations No. 7-95 and the individual filing of an application therefor by your suppliers is hereby dispensed with. For proper documentation purposes, kindly require your suppliers to clearly stamp their VAT Invoice with the notation "zero-rated sale" and with reference to the number and date of this revalidation ruling. It must be understood, however, that the tax privilege accorded to the Bank does not extend to its personnel. This ruling serves as a revalidation of your VAT exemption certificate dated November 29, 1989. Very truly yours, (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue