VAT Ruling No. 108-99

November 22, 1999 VAT RULING NO. 108-99 R.R. 7-95-000-00-108-99 Ms. Teresita T. Eugenio 2024 Paradise St., Pandacan. Manila 1011 Attention: Mr . Kuniaki Nova Accounting Department Manager Dear Ms. Eugenio : This refers to your letter dated May 3, 1999 seeking for a ruling on whether there is still a necessity for VAT registration of your hauling services with sales/gross receipts not exceeding P550,000.00 per quarter, when you already are operating a trading business with sales in excess of P550,000.00 per quarter and which activity is VAT registered. Accordingly, both lines of business are registered under your name as a sole proprietor. In reply, please be informed that under the Compliance Requirements of Rev. Regs. No. 7-95 implementing R.A. 7716 (EVAT), it is stated: "SEC. 4.107-1. Registration of Value Added Taxpayers. (b) Mandatory: (1) Persons covered. Every person who, in the course of trade or business, sells, barters, exchanges, leases goods, properties or renders services subject to VAT, of the aggregate amount of his actual or expected gross sales and/or receipts exceeds FIVE HUNDRED THOUSAND PESOS (P500,000.00) [now P550,000.00 under R.A. 8241 and RA 8424] for any twelve month period;'' Moreover, it has been clarified under Revenue Memorandum Circular No. 39-95 or the unified procedures for registration of taxpayers under Revenue Memorandum Circular No. 41-94 particularly under Q-48 thereof. that "Q-48: Assume that H and W husband and wife are separately engaged in the following lines of businesses: "HUSBAND Trucking P400,000.00 Trading 150,000.00 Barbershop 100,000.00 Jeepney Operator 124.000.00 P774,000.00 "WIFE Pharmaceutical P100,000.00 Parlor 50,000.00 Restaurant 100,000.00 P950,000.00 All these businesses are conducted in only one establishment. H and W have separate TIN and the businesses were separately registered in the name of H or W with the Department of Trade and Industry . " How do H and W register their businesses? How much registration fee will be paid by them? "A-48: H shall file one application for Registration covering his lines of business and pay the P1,000 registration fee. His trucking. trading and barbershop business will be registered as VAT while that of jeepney operator will be registered as Non-VAT. W shall also file a separate application for registration covering all lines of business under her name and pay the P1,000 registration fee. Since the aggregate gross receipts on all the lines of business did not exceed P500,000, W's registration will be non VAT." Accordingly, the aggregate gross sales and/or receipts of all your business activities shall be the basis in determining the applicability of the threshold of P550,000 per mandatory VAT registration. Considering that both your trading and hauling business combined have a gross sales exceeding P550,000, then your registration should be that of a VAT taxpayer. Hence, your non-VAT registration for the hauling business should be canceled. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue