VAT Ruling No. 074-90

March 23, 1990 VAT RULING NO. 074-90 Datagraphics, Inc. Doa Virginia Bldg. Urense cor. Del Carmen Street Guadalupe, Makati Metro Manila Attention: Mr . Antonio Inocentas Vice-President Finance S i r s : In response to your application for VAT zero rating of your sale of goods and services to various companies, please be informed as follows: (a) Pursuant to LOI 1416, payment of taxes by companies belonging to the distressed copper mining industry was merely suspended and was never intended to be an exemption from the tax. Said privilege of suspended tax payment was already lifted, in October 1988 under Executive Order No. 340 and all distressed mining companies were required to pay back taxes thereafter. Moreover, although North Davao Mining Company (NDMC) is subject to VAT at zero rate on its export sales, your transactions with it will not qualify for effective zero-rating under Section 2 of Revenue Regulations No. 12-58. casia (b) As an EPZA-registered firm, the exemption privilege granted to Philippine Shipyard & Engineering Corp. (PHILSSEO) under Article 8 in relation to Article 39 of Executive Order No. 226 (Omnibus Investment Code), is limited only to taxes that it is directly liable and will not include indirect taxes being passed on to it by its suppliers. (c) The VAT exemption privilege granted to: (1) Newsounds Broadcasting Network (Section 103 (j) of the Tax Code as amended), (2) n Section 103 (j) of the same Code, (3) Vintage Enterprises, Inc. (VAT Ruling No. 21-88), and (4) Asia Foundation (Republic Act No. 3538 as amended by P.D. No. 1127) is likewise limited only to the taxes that they are directly liable. (d) The exemption privilege granted to (1) Star of Hope Philippines Inc., (2) School of Holy Spirit; and (3) Faith Academy is limited only to income taxation and does not extend to other internal revenue taxes. (e) The tax exemption privilege given to the following organizations: (1) Rehabilitation Placement Foundation for Disabled, Inc. (2) Kaisahang Buhay Foundation (3) Holy Spirit Association for the Unification of World Christianity is limited only to the deductibility for income tax purposes of contributions made to such donee institutions pursuant to Section 30 (h) of the Tax Code, as amended. On the basis of the above facts, your applications for zero rate are disapproved; consequently, your sale of goods and services to the abovementioned companies are subject to 10% VAT pursuant to Section 100 and 102 of the same Code. dctai Very truly yours, JOSE U. ONG Commissioner of Internal Revenue n Note from the Publisher: Illegible portion in the official copy.