VAT Ruling No. 055-92

April 28, 1992 VAT RULING NO. 055-92 NIRC Sec. 099 Precedent Ruling 000-00 COMPDEV, Incorporated 3rd Floor, L&R Building 1018 SLV, Pasay Road Makati, Metro Manila Attention: Ms. Anna Marie Cosio VP-Marketing Gentlemen : This refers to your application for zero-rated value-added tax vis-a-vis your sales of services to the REMOTE SENSING PROJECT, undertaken pursuant to the Memorandum of Understanding between the Government of the Philippines and the Government of Australia. In reply please be informed that under Paragraph 7.1 thereof which provides, thus "7.1 In respect of project supplies, motor vehicles and professional and technical material and services whether to be imported into and/or procured within the Philippines, the Government of the Republic of the Philippines will: (a) be responsible for the payment of import duties, value-added tax (VAT) and other duties and taxes imposed in the Philippines; and be responsible for inspection fees, storage charges and all other levies, fees and charges; . . . your request for zero percent VAT can not be granted for lack of legal basis. On the contrary, your sales to the said Project are subject to the 10% value-added tax, pursuant to Section 99, NIRC. Since the above cited provision of the MEMORANDUM OF UNDERSTANDING expressly provides that the Philippine Government shall be responsible for the payment of VAT, among others, in respect of project supplies motor vehicles and professional and technical services, the VAT due thereon shall be borne by the government agency sponsoring the Remote Sensing Project. IHTASa Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in Charge