VAT Ruling No. 092-99

September 14, 1999 VAT RULING NO. 092-99 R.A. 8424-000-00-092-99 J . C . Marquez Architect & Consultants Rm. 416, Comfoods Building G. Puyat Ave. corner Chino Roces Ave. Makati City 1200 Attention: Arch . Jaime C . Marquez . FUAP Principal Architect Gentlemen : This refers to your letter to Mr. Ruben S. Reinoso, Jr., Director, Infrastructure Staff, National Economic and Development Authority (NEDA), dated May 31, 1999 which the NEDA referred to this Office for resolution of the issue on whether or not your sale of consulting services to NEDA is subject to the 10% value added tax (VAT). prcd In reply, please be informed that Section 5 of R.A. No. 8424 provides: "SEC. 5. Transitory Provisions . Deferment of the Effectivity of the Imposition of VAT on Certain Services . The effectivity of the imposition of the value-added tax on services as prescribed in Section 17 (a) and (b) of Republic Act No. 7716 as amended by Republic Act No. 8241 is hereby further deferred until December 31 1999 unless Congress deems otherwise: Provided, That the said services shall continue to pay the applicable tax prescribed under the present provisions of the National Internal Revenue Code as amended." Section 17 of R.A. 7716, as amended by Section 11 of R.A. 8241, as referred to above, provides: "SEC 17. Effectivity of the Imposition of VAT on Certain Goods Properties and Services . The value-added tax shall be levied, assessed and collected on the following transactions, starting January 1, 1998. "(a) Services performed in the exercise of profession or calling subject to the professional services performed by registered general professional partnerships; actors, actresses, talents, singers and emcees; radio and television broadcasters, choreographers; musical, radio, movie, television and stage directors; and professional athletes; xxx xxx xxx Accordingly, your sale of consulting services in the exercise of your profession exempt from VAT until December 31, 1999, pursuant to Section 5 of R.A. No. 8424, hence, you shall not pass on any 10% VAT on your sale of consulting services to NEDA. LibLex Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue