VAT Ruling No. 039-91

May 29, 1991 VAT RULING NO. 039-91 FTM Brokerage Corporation Unit 410-412 Plaza Towers Condominium 117E L. Guerrero St., (cor. Arquiza) Ermita, Manila Attention: Mr . Felipe E . Abella President and Gen Manager S i r : This refers to your letter dated December 12, 1990 requesting for exemption from the payment of the 10% VAT for the importation of three (3) thoroughbred broodmares for breeding purposes pursuant to Section 103(b). In reply thereto, please be informed that the VAT exemption granted to breeding stocks and genetic materials under Section 103(b) of the Tax Code, as amended, is limited only to those that are intended for the raising of poultry and livestock (which includes cows, bulls, calves, pigs, goats and rabbits). It only refers to live animals that are generally used as, or yielding or producing food for human consumption [Sec. 9(b)(2) of Revenue Regulation 5-87]. Since the horses out of the aforecited breeding stocks cannot be classified as livestock, but are to be used in sports or games, their importation is not exempt from VAT under Section 103(b) of the same Code. Such being the case, your request is denied for lack of legal basis, thus, your importation of broodmares is subject to the 10% Value-Added Tax pursuant to Section 101(a) of the same Code. This finds support in VAT Ruling Nos. 102-89 and 243-90. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue