VAT Ruling No. 076-91

August 7, 1991 VAT RULING NO. 076-91 Smith Kline & French Overseas Co. P.O. Box 229, MCC, Makati M.M. Attention: Ms . Armie C . Nuez Treasury Manager Gentlemen : This refers to your letter dated November 12, 1990 requesting clarification as to the proper basis for calculating your output VAT. It is represented that your company is engaged in business as drugs manufacturer; that your company sells these products to Zuellig Pharma Corporation, as your distributor; that you issue VAT-registered sales invoices on your sales thereto, 10% VAT included in the amount billed; that, Zuellig sells said products to the general public, the 10% VAT separately billed in its VAT registered sales invoices issued. Please be informed that the VAT is imposed on the taxable sales of the seller . Accordingly, your output VAT should be based on the gross sales price appearing in your invoice, not the sales price appearing on the invoice of your customer (Zuellig Pharma Corporation), exclusive of the tax , if it is billed as a separate item on the invoice (Section 100(d)(1) NIRC); otherwise, the tax shall be determined by multiplying the gross selling price, including the amount you intended to cover the tax by the factor 1/11 (Section 100(d)(2), NIRC). prcd Very truly yours, JOSE U. ONG Commissioner of Internal Revenue