VAT Ruling No. 084-90

March 30, 1990 VAT RULING NO. 084-90 Ferry, Toledo, Victorino and Associates AFC Building Alfaro cor. H. V. de la Costa Salcedo Village, Makati Metro Manila Attention: Atty . Agustinus V . Gonzaga Partner S i r s : This has reference to your letter dated January 31, 1989, seeking a ruling if your client, MURRAY FISHER GROUP, a VAT-registered partnership engaged in consultancy services and exportation of mining equipment, is entitled to a tax refund or tax credit of value-added taxes it has paid based on the facts stated hereunder, viz: llcd 1. On behalf of an Australian principal, your client purchased Kobe ball mills (including accessories) as foreclosed properties from the Consolidated Bank and Trust Co.; 2. Your client undertook the removal of said mills from the minesite after the sale and had them refurbished, following the terms of the contract agreed upon between the two parties, the local agent/representative and the foreign principal; 3. In the process of refurbishing, value-added taxes were charged by local contractors and suppliers whose VAT invoices were all issued in the name of your client; and 4. After the refurbishing was completed, the mills were shipped to Australia by your client. In order to simplify documentation, the export documents are all under the name of Consolidated Bank, as the bank/seller/shipper. Thus, your client does not appear as the exporter. In reply, please be informed that your client cannot claim refund of the VAT passed on by the local contractors and suppliers in connection with the refurbishing process notwithstanding the fact that the VAT invoices are all in the name of your client since the title to the article is in the name of the Australian principal. Moreover, your client never performed an activity that can qualify it as contractor and the other local contractors as subcontractors. However, it qualifies as a broker or agent which renders services that are subject to the value-added tax pursuant to Section 102 of the Tax Code. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue