VAT Ruling No. 093-89
VAT Ruling No. 093-89 • Bureau of Internal Revenue (BIR) Issuances • VAT Rulings • Apr 5, 1989
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April 5, 1989 VAT RULING NO. 093-89 Mr. Jose S. Rodriguez General Manager ISAP, Inc. Room 450, Regina Building Escolta, Manila Dear Sir : In connection with your request for a clarificatory ruling on the application of the value-added tax to reinsurance commissions, please be informed that the two opinions rendered by former Commissioner Bienvenido A. Tan, Jr. (under BIR Ruling No. 186-88) and Deputy Commissioner Eufracio Santos (under BIR Ruling No. 155-88) do not conflict against each other. As ruled out under BIR Ruling No. 155-88 the VAT is imposed on the overriding commissions that can be classified as charges for services which are performed for others by a reinsurance agent or insurance broker. The imposition of the VAT is limited only to services rendered by an agent or broker who is a juridical person as indicated under BIR Ruling No. 186-88. Such being the case, if the services are rendered by an agent/broker who is a natural person subject to the P75 occupation tax under the Local Tax Code, then the service charge is not subject to VAT. Very truly yours, EUFRACIO D. SANTOS Deputy Commissioner
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