VAT Ruling No. 057-90

February 28, 1990 VAT RULING NO. 057-90 102 (a) (2)-000-00-057-90 Punongbayan and Araullo Certified Public Accountants 6th Floor, Vernida IV Bldg. Alfaro St. Salcedo Village Makati, Metro Manila Attention: Ms . Rosario S . Bernaldo Tax Partner S i r s : This refers to your letter dated July 7, 1989 wherein you stated that your client Phillips Petroleum International Inc. (PPII) which is a Philippine branch of a Panamanian corporation and is duly licensed to do business in the Philippines entered into agreement with Phillips Petroleum International Corporation and International Petroleum Sales, Inc. (PPIC-IPSI) to promote the sale and the use of its products and that your client receives a fee on a commission basis and is being paid for in US dollars inwardly remitted in accordance with Central Bank rules and regulations. Based on the foregoing you now request for a ruling on the applicability of the value-added tax on your client's commission income. In reply, please be informed that as a VAT registered person, your client's commission income from PPIC-IPSI is subject to VAT at 0% effective January 1, 1988 provided that the income is paid for in foreign currency inwardly remitted to the Philippines in accordance with Central Bank rules and regulations. [Sec. 102 (a)(2) of the Tax Code as amended]. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue