VAT Ruling No. 087-88

April 14, 1988 VAT RULING NO. 087-88 100-000-00-087-88 MANN (ASIA) Resources Dev't.,Corp. V.V. Soliven Bldg. I EDSA, Greenhills San Juan, Metro Manila Attention: Mrs . Estelita Madlansacay Treasurer S i r s : This refers to your letter dated March 22, 1988 requesting information on the applicability of the value-added tax on the following businesses: (1) Review classes for nursing, CGFNS, nutrition and midwifery; (2) Recruitment services; and (3) General merchant. In reply, please be informed that all of the above-mentioned activities are subject to VAT pursuant to Sections 100 and 102 of the Tax Code, as amended by E. O. No. 273. For tax credit purposes, the input taxes for the purchase of goods for use as supplies in connection with trade or business or as materials in the sale of services can be claimed against your output law. In the computation of the VAT on recruitment services, the basis of the tax is the amount of placement fee which will not include reimbursement of expenses which shall be limited to fees for passport/visa, medical examination, clearances and inoculation provided that these expenses are supported by receipts issued by the supplying company or government agency in the name of the applicant. On the other hand, the agency is required to pay the 10% VAT on the entire amount of placement fee if the abovementioned reimbursable expenses are supported by receipts issued in the name of the agency. Very truly yours, BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue