VAT Ruling No. 057-91

June 21, 1991 VAT RULING NO. 057-91 Sen. Orlando S. Mercado Senate, Manila S i r : This refers to your letter dated February 25, 1991, requesting confirmation whether a donation of two (2) boxes of church bells and spares consigned to Rev. Fr. Avelino Sipin of the St. James The Greater Parish of Santiago, Ilocos Sur is exempt from 10% Value-Added Tax. It is represented that the donation of said church bells and spares valued at P85,400 from London, England are exempt from duty payments as embodied in the NEDA Rules and Regulations governing the implementation of Sec. 105 of the Tariff and Customs Code, as amended; but, however, subject to 10% VAT under the provisions of Section 101 of the Tax Code, as amended by E.O. No. 273, therefore liable for VAT payment of P43,846 and an additional import levy of 9% or P24,641 pursuant to E.O. No. 443. In reply thereto, please be informed that importations are subject to 10% VAT whether donated or purchased. This however, does not apply to transactions where the recipient is granted special exemption privileges, i.e.,exemption from indirect taxes like VAT, under its charter or provided for under the Constitution. Such being the case, importation of articles consigned to charitable, religious, cultural or social welfare corporations or institutions are not exempt but are subject to 10% VAT. This finds support in VAT Ruling No. 169-89. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue