VAT Ruling No. 036-91

May 29, 1991 VAT RULING NO. 036-91 DC Group, Inc. J.P. Laurel Avenue Davao City Attention: Mr . Zosimo D . Co President S i r s : This refers to your letter dated May 18, 1990 requesting information whether your take-out counter sales are subject to the 10% VAT. It was represented that your company bakes Dunkin Donuts based on a special franchise granted to you by Golden Donuts, Inc. of Manila; that you presently operate three (3) outlets in Davao City wherein you serve within the premises food items consisting of donuts, coffee, hot chocolate, fruit juices and softdrinks, and that you maintain a take-out counter for the convenience of your customers. In reply, please be informed that you are subject to the 4% caterer's tax on your operation of a refreshment parlor or eating place pursuant to Section 114 of the Tax Code. You are also subject to 10% VAT as a bakeshop on your operation of take-out counter pursuant to Section 100(a) of the Tax code. In other words, since you are in effect operating two lines of business you will register as a Non-VAT taxpayer for your refreshment parlor or eating place pursuant to Revenue Regulation No. 6-88 and as a VAT taxpayer for your operation of a take-out counter pursuant to Section 18 of Revenue Regulation No. 5-87. However, if your sales from your take-out counter do not exceed P200,000 in any 12 month period, you may opt not to register as a VAT taxpayer in which case your receipts therefrom shall be subject only to 2% percentage tax pursuant to Section 112 of the same Code. This finds support in BIR Ruling No. 199-90. prcd Very truly yours, JOSE U. ONG Commissioner of Internal Revenue