VAT Ruling No. 035-00

September 20, 2000 VAT RULING NO. 035-00 RMO #9-2000 000-00 Mesco, Inc . P.O. Box 1688 MCPO 1256 Makati City Philippines Attention: M . S . Sevilla Credit and Collection Officer Gentlemen : This refers to your letter dated May 23, 2000 requesting for clarification of Revenue Memorandum Order (RMO) No. 9-2000. It is represented that members of the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI), through a SEIPI memorandum dated March 29, 2000, claim that they are already entitled to an outright VAT exemption by virtue of RMO 9-2000 such that you are now requesting an advisory on the matter so that you can use the same for dissemination to your customers. cDHCAE In reply, please be advised that pursuant to RMO 9-2000, sales of goods, properties or services by VAT-registered suppliers to BOI-registered exporters shall be treated as automatically zero-rated sales, without need of prior approval from this Office, provided that the supplier and the BOI-registered buyer are both VAT-registered taxpayers and provided further that the buyer is classified as 100% exporter by the Board of Investments (BOI). It shall be the duty of the buyer to furnish the seller with proof, usually in a current certification by the BOI, that it is an exporter with 100% export sales. If the said certification is presented, the seller may then recognize the transaction as a zero-rated sale by issuing a duly-registered VAT invoice with the notation "zero-rated" clearly imprinted or stamped therein. Additionally, the seller must likewise indicate in the VAT invoice the BOI-registry number and/or reference of the certification issued by the BOI. To date, the BOI has not yet officially furnished the BIR with the official list of exporters with 100% export sales such that we are unable to advise you whether or not all the members of SEIPI are entitled to the benefit of the automatic zero-rating. But for so long as they can present a BOI certification to this effect, this Office would consider the transaction as zero-rated for VAT purposes. Very truly yours, (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue