VAT Ruling No. 098-88

April 14, 1988 VAT RULING NO. 098-88 103 (g) / 114-000-00-098-88 Banaria, Banaria & Co. Certified Public Accountants Second Floor, LDCI Bldg. 768 EDSA Cor. East Ave. Quezon City 1100 Attention: Mr . Pascasio S . Banaria Partner S i r : This refers to your letter dated Jan. 20, 1988 inquiring about the proper tax treatment of the various sources of receipts/income of your client, Quezon City Sports Club, Inc. llcd In reply, please be informed that: 1. Of the sources of receipts/income enumerated in your letter, only sauna fees are subject to value-added tax (VAT) inasmuch as they correspond to payments for services; 2. The rest are treated as follows: a. Membership dues and fees and guest fees are more contributions and are not subject to VAT; b. Sales in restaurants and bars are subject to the percentage tax on caterers under Sec. 114 of the Tax Code, as amended by E.O. No. 273; c. Tennis, pelota, squash, badminton, bowling, billiards and gym fees are payments for the use of facilities and are exempt from VAT; d. Shop rentals are fees for leasing of real property and are exempt from VAT under Sec. 103(q) of the Tax Code; and e. Other income like interest and dividends are not subject to VAT but are subject to income tax. llphil Please be guided accordingly. Very truly yours, BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue By: VICTOR A. DEOFERIO, JR. Deputy Commissioner