VAT Ruling No. 106-90

May 8, 1990 VAT RULING NO. 106-90 Mr. Danilo A. Duncano Actg. Asst. Revenue District Officer Revenue District No. 80 Bayugan, Agusan del Sur S i r : This has reference to your letter dated March 27, 1989 requesting for clarification on the following: a. Is the sale of capital goods by a non-VAT-registered person under Section 112 of the Tax Code, subject to 2% percentage tax? and b. Is the sale of capital goods taken into consideration in the determination of the P200,000 sales/receipts limitation as a criterion on whether or not a business establishment is subject to VAT or to the 2% percentage tax. cdll In reply, please be informed of the following: a. The sale of capital goods by a non-vat registered person is not subject to 2% percentage tax which, under Section 112 of the Tax Code as amended, is composed only on the sale of goods and/or services. This is not similar to the imposition of the value-added tax on the sale of capital goods by a VAT-registered person which under Section 99 of the same Code must have used the same in the course of trade or business. b. In determining the P200,000 sales, as criterion of subjecting a business. llcd * Very truly yours, JOSE U. ONG Commissioner of Internal Revenue By: VICTOR A. DEOFERIO, JR. Deputy Commissioner