VAT Ruling No. 052-97

August 04, 1997 VAT RULING NO. 052-97 Sec. 17 (R.A. 7716)-000-052-97 Alapag, David, Palacio & Co. Certified Public Accountants Marlim Mansions, Suite No. 2 & 3 Balibago, Angeles City Attention: Mr . Marcelino T . Alapag Gentlemen : This refers to your letter dated February 27, 1996, requesting clarification as to whether or not a general professional partnership (accounting practice) is exempt from payment of VAT, and if so, whether telephone companies, electric companies and realty corporations can pass on the VAT to the partnership. In reply, please be informed that pursuant to Section 17 of the National Internal Revenue Code as amended by Republic Act No. 7716 and further amended by R.A. No. 8241 which provides: SEC. 17. Effectivity of the Imposition of VAT on Certain Goods, Properties and Services. The value-added tax shall be levied, assessed and collected on the following transactions starting January 1, 1998: a) Services performed in the exercise of profession or calling subject to the professional tax under the Local Government Code or R.A. No. 7160, professional services performed by registered general professional partnerships. . . . a general professional partnership shall not be covered by VAT until January 1, 1998. However, before January 1, 1998 general professional partnership is required to register as a Non-VAT taxpayer. Moreover, entities supplying goods or services to them, i.e., telephone companies, electric companies, realty corporations are not precluded from passing on the VAT to them as part of the cost of services rendered pursuant to Section 99 of the Tax Code, as amended. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue