VAT Ruling No. 092-92

July 16, 1992 VAT RULING NO. 092-92 NIRC Sec. 100 (a) (2) 102 (a) (3) Precedent Ruling 019-91 Bureau of Internal Revenue Revenue Region No. 6B Bacolod City, 6100 Negros Occidental Attention: Ms. Jardiolin C. Ureta Assistant Regional Director Gentlemen : This has reference to your letter dated April 3, 1992 concerning the letter of Mr. Gregorio L. Uymatiao, Jr., General Manager of G. Uymatiao , Jr. Construction located at Dumaguete City, requesting that his company be granted zero-rated VAT on the proceeds of its contract with the Province of Bohol for the construction of Catungawan Barangay High School, financed by the Economic Support Fund. In reply thereto, please be informed that pursuant to the RP-US Military Bases Agreement and the bilateral agreement between the two governments exempting the proceeds of the Economic Support Fund (ESF) from the Philippine government tax and other impositions, the use of the fund to finance government projects which are paid directly from said fund are within the purview of effectively zero-rated transaction contemplated under Section 100(a)(2) and 102(a)(3) of the Tax Code. In other words, billings by the seller of goods or services who executed the projects funded by ESF shall not include the value-added tax (VAT): Provided, however, that the seller of said goods or services shall first apply for zero-rating in accordance with Section 8(d) of Revenue Regulations No. 5-87. Please be guided accordingly. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue