VAT Ruling No. 041-90

February 15, 1990 VAT RULING NO. 041-90 103 (j)-000-00-041-90 Messrs. Espaso, Orinio, Santos and Associates Certified Public Accountants 3rd Floor, JCI Bldg., No. 13-F Nicanor Roxas Cor. Iba St., SMH, Quezon City Attention: Mr . Julio Y . Espeso Managing Partner Gentlemen : This refers to you letters dated October 17, 1989 requesting clarification whether a taxpayer who is already a duly VAT Registrant is still required to pay the Common Carrier's Tax. In reply, please be informed that a taxpayer who is engaged in the business of hauling, trucking and freight services is a common carrier. Thus, it has been held that, "a common carrier is one who, by virtue of his business or calling, undertakes for compensation to transport personal property from one place to another, either by land or water, and deliver the same for all who may choose to employ him; and every one who undertakes to carry and deliver for compensation goods of all persons indifferently is, as to liability, to be deemed a 'common carrier.'" (US vs. Ramsy, 197 Fed. 144, 146, 116, CDA 568). Such being the case, he is subject to the 3% common carrier's tax prescribed in Sec. 115 of the Tax Code, as amended, and not to the 10% value added tax. If he has registered the aforesaid business activity for VAT purposes, his registration is void from the beginning and in order to obviate any tax consequence on his transactions, he should request for the immediate cancellation of his VAT registration. Moreover, he should issue non-VAT invoices for his transactions. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue