VAT Ruling No. 062-90

February 28, 1990 VAT RULING NO. 062-90 102-000-00-062-90 The Revenue District Officer Revenue District No. 9 Tuguegarao, Cagayan S i r : This refers to your telegram dated November 9, 1989 requesting information on the applicability of the value added tax on operators of cable TV system who for a monthly fee, provide entertainment programs through the cable system to household viewers through their own television units. In reply, please be informed that under Sec. 102 of the Tax Code, as amended, lessors of personal property are subject to the value-added tax. In BIR Ruling dated February 11, 1988, it was held that buying and selling TV airtime is not subject to the value-added tax since such business activity is not a sale of services, labor or goods but a sale of intangible property rights. Since under the law, only sellers of intangible personal property are exempt from VAT, lessors of intangible personal property are subject to VAT. Consequently, operators of cable TV who are considered as lessors of personal property, are subject to the value-added tax. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue