VAT Ruling No. 097-91

December 27, 1991 VAT RULING NO. 097-91 103 (f)-000-00-097-91 The Business Star 202 13th St.,corner Railroad Port Area, Manila Attention: Ms . Betty Go Belmonte President Gentlemen : With reference to your letter dated October 29, 1991, please be informed that under Section 104 of the National Internal Revenue Code, as amended by Executive Order No. 273, only a VAT-registered person is authorized to recognize input taxes on his importation of goods or local purchases of goods and services from a VAT-registered person. The said input taxes shall be credited against the output taxes payable by the VAT-registered person; provided, that in the case of domestic purchases of goods or services, the invoice or receipt was issued by a VAT-registered person in the manner prescribed in Section 108 of the Tax Code. As a publishing company, your publication of any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of advertisements is exempt from VAT pursuant to Section 103(f) of the Tax Code, as amended. However, your local purchases or importation of goods, i.e. capital equipment, shall remain subject to 10% VAT pursuant to Section 99 in relation to Section 101, both of the Tax Code. Such being the case, as a VAT-exempt entity you are not entitled to claim input tax vis-a-vis the 10% VAT component of your purchases of goods and services and on your importation of goods. Such VAT paid on your purchases or importation of goods, i.e.,capital equipment, may only be used as a cost deduction in computing your net income for income tax purposes. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue