VAT Ruling No. 046-90

February 15, 1990 VAT RULING NO. 046-90 102 (a)-000-00-046-90 Clariben Construction 2 Mt. Clemens St. Filinvest Homes I Capital District, Q.C. Attention: Clarita L . Jimenez Managing-Owner S i r s : This is in connection with your letter dated July 28, 1989, wherein you represented that your company is a private contractor engaged in hauling garbage for the Metro Manila Commission and that the 4% quarterly tax (as a common carrier and transportation contractor) is being deducted automatically from your collections. cdta Based on the foregoing, you would like to be informed if you are exempt from the Value Added Tax (VAT), since you are required to pay the 4% quarterly tax (through the withholding system) under Section 115 of the Tax Code as amended. In reply, please be informed that effective January 1, 1988, you are subject to the 10% VAT based on your gross receipts as a contractor, pursuant to Sec. 102(a) of the Tax Code, as amended by E.O. No. 273. The 4% quarterly tax which you allege to have been withheld by the Metro Manila Commission (MMC) as common carrier's tax, may be treated as taxes erroneously collected upon proof that the same have actually been withheld from you and remitted to the government, and may be credited or refunded to you, provided that, you file in writing with the Commissioner of Internal Revenue a claim for credit or refund within two (2) years after payment of the tax [Sec. 204 of the Tax Code, as amended]. In this connection, please be informed that the VAT is not subject to withholding since the VAT due is not yet fixed and determinable at the time of payment of the fee or contract price by the MMC. However, 1% of the gross amount of payment made to you exclusive of VAT, shall be subject to the expanded withholding tax [Sec. 1(e)(2)(o) of Revenue Regulations No. 6-85, in relation to BIR Ruling No. 073-89]. llcd Very truly yours, JOSE U. ONG Commissioner of Internal Revenue