VAT Ruling No. 081-92
VAT Ruling No. 081-92 • Bureau of Internal Revenue (BIR) Issuances • VAT Rulings • Jun 22, 1992
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June 22, 1992 VAT RULING NO. 081-92 NIRC Sec. 102 (a) Precedent Ruling 000-00 PAC/BBDO Worldwide, Inc. Dominion Building 833 Pasay Road Makati, Metro Manila Attention: Mr. Rory O. Martija Accounting Manager Gentlemen : This refers to your letter dated December 10, 1991 inquiring whether volume and prompt payment discounts are subject to Value-Added Tax (VAT) or not. You further stated that instead of a rebate, you are allowed to deduct the discounts from your accounts payable to your suppliers and recognize them as Miscellaneous Income in your financial statements. In reply, please be informed that since PAC/BBDO Worldwide, Inc. is an advertising agency and the buyer, for its clients, of services offered by TV, radio and print media, it is not liable to pay the 10% VAT on the volume and/or prompt payment discounts given by said sellers of advertising services. Only the sellers (not the buyers) of services are liable to pay the VAT under section 102(a) of the Tax Code. cCEAHT Very truly yours, JOSE U. ONG Commissioner of Internal Revenue By: (SGD.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge
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