VAT Ruling No. 055-90

February 28, 1990 VAT RULING NO. 055-90 Philippine Hanse Ship Agency, Inc. P.O. Box 667 1299 Makati, Metro Manila S i r s : This refers to your letter dated May 4, 1989 where you represented that as VAT-registered entity, your sale of manning and crewing services are subject to the VAT at zero rate pursuant to Section 102(a) (2) of the Tax Code, as amended, and that it entails additional administrative work for you and your suppliers when you apply for refund or tax credit of your input taxes. In this regard, you now request for an exemption from the payment of input taxes on your purchase of goods and services from VAT-registered sellers. In reply, please be informed that your request cannot be granted for lack of legal basis. The 10% VAT is a tax against the seller of goods and services (Sec. 99, NIRC, as amended). Being an indirect tax in nature, it is accordingly passed-on to the buyer, whether or not separately billed in the invoice issued by the seller pursuant to Section 108 of the same Code. Your being entitled to zero-rated VAT on your sale of certain services does not entitle your suppliers of goods and services to exemption from the payment of the 10% VAT on sales made to you. Your only benefit under the law is to claim for refund or for the tax credit of the input taxes passed-on to you, pursuant to the provisions of Sec. 106(b) of the NIRC. Please be guided accordingly. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue