VAT Ruling No. 043-88

March 1, 1988 VAT RULING NO. 043-88 102 (a)-000-00-043-88 Wormald Chittick, Inc. Unit No. 3 Southway Condominium Cor. Mayapis & Yakal St., Makati, Metro Manila Attention: Mrs . Alice R . Dumangas Accounting Manager S i r s : This has reference to your letter dated February 18, 1988 requesting for a ruling on the 10% value-added tax charged by subcontractors on services rendered to a general contractor of US air and naval bases. cdta In reply, please be informed that pursuant to Sec. 102 (a) (3) of the Tax Code as amended by E. O. 273, the services rendered by general contractors to US bases are effectively zero-rated. However, such provision is not extended to subcontractors thus, allowing them to add and collect the 10% VAT on the agreed contract price from the general contractors. On the other hand, the general contractor, being a VAT registrant at zero-rate can claim as tax credit the whole 10% VAT charged by the subcontractor. cd Very truly yours, BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue