VAT Ruling No. 087-92

July 2, 1992 VAT RULING NO. 087-92 NIRC Sec. 102 Precedent Ruling 000-00 Bradford Consultancy Services 646 Taysan Street Ayala Alabang Village Muntinlupa, Metro Manila Attention: Mr. Colin Bradford General Manager S i r s : This refers to your letter dated November 28, 1991 stating that your partnership, Bradford Consultancy Services, is a VAT-registered entity which is engaged in management consultancy in the insurance business for local as well as foreign client. In this regard, you request confirmation as to whether or not the income received from your clients abroad is exempt from payment of the 10% value-added tax (VAT). In reply thereto, please be informed that the income received as compensation for services rendered abroad by Bradford Consultancy Services to companies located outside the Philippines, which are paid in foreign currency or US dollars, is exempt from the 10% VAT imposed by the Philippine Government inasmuch as said foreign clients and place where the services are actually to be rendered are not within its taxing jurisdiction. Consequently, for this kind of service the same would not be zero-rated and no refund of input taxes attributable to said service would be allowed. However, the consultancy services rendered to local clients, payment for which are received in local currency, shall be subject to 10% VAT pursuant to Section 102(a) of the Tax Code. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue