VAT Ruling No. 034-00

September 8, 2000 VAT RULING NO. 034-00 Sec. (106) (A) (2) (a) (3) 000-00 J . P . Tolentino & Company Certified Public Accountant No. 16 Pelota Street St. Francis Village Cainta, Rizal Gentlemen : This refers to your letter dated May 25, 1998 stating that your client, Pacific Fruit Processors, Inc ., is a VAT-registered domestic corporation engaged in processing raw banana fruits into banana chips for export; and that its production is one hundred percent (100%) export sales. Based on the foregoing, you are requesting this Office to confirm your opinion that the suppliers of raw materials and/or packaging materials to Pacific Fruit Processors, Inc., are subject to VAT at 0% rate on the items supplied to your client. In reply, please be informed that we hereby confirm said opinion based on Section 106(A)(2)(a)(3) of the Tax Code of 1997 which provides, viz: "Sec. 106. Value-Added Tax on Sale of Goods or Properties . "xxx xxx xxx "(2) [ Zero-rated Sales ] The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales . The term 'export sales' means: "xxx xxx xxx "(3) Sale of raw materials or packaging materials to export oriented enterprise whose export sales exceed seventy percent (70%) of the total annual production; "xxx xxx xxx This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the fact are different, then this ruling shall be considered null and void. TDCaSE Very truly yours, (SGD). DAKILA B. FONACIER Commissioner of Internal Revenue