VAT Ruling No. 112-88

April 21, 1988 VAT RULING NO. 112-88 100/102/103-000-00-112-88 Messrs. Ferry, Toledo and Victorino Law Office AFC Building Alfarero cor. H. V. dela Costa Salcedo Village Makati, Metro Manila Gentlemen : This has reference to your letter dated October 26, 1987 requesting comment on the in-house study made on the effect of the value-added tax on Philamlife and its affiliate firms. cdtech In reply, please be informed of the following: A. Those exempt from VAT 1. Philamlife on its receipts from insurance premiums [Sec. 103(j)] 2. PERF Realty and Kapatiran Realty on its rental receipts and receipts from sale of real estate [Sec. 103(q)] 3. Philippine Prawn Farm Inc. on its domestic sale of prawns to processors, traders and exporters [Sec. 103(b)] 4. Philamcare on its sale of health care package including medical insurance, health maintenance program, outpatient benefits, surgical benefits, etc. [Sec. 103(1)] B. Those subject to VAT 1. GS Philippines Enterprises is subject to 0% on its services in cutting, making and trimming fur coats for export and the processing fee is paid in acceptable foreign currency inwardly remitted to the Philippines and accounted for in accordance with the rules and regulations of the Central Bank [Sec. 102(i)] 2. Tri-Phil. International, manufactures baseball and ski gloves to be marketed by certain firms in the US and Japan. If the company is a manufacturer-exporter, its export sales are automatically zero-rated if it registers for VAT purposes. However, if it merely supplies an export trader, the sales are considered domestic sales and are subject to VAT [Sec. 100(a)] 3. Entrepreneurs and Exporters Inc., on its export sales is subject to zero rate [Sec. 100(a)(1)] 4. Mercadex Inc. on its commercial brokerage services [102(a)] and on its local sales of goods [Sec. 100(a)] 5. AIGDCM and Comarseco, which render data processing and auditing services to Philamlife affiliates on reimbursement of cost basis, are subject to VAT. Generally, under Sec. 102, services rendered by any entity regardless of whether or not it is for profit, are subject to VAT notwithstanding the fact that the two entities were formerly subject to the 4% contractor's tax. cdt Please be guided accordingly. Very truly yours, EUFRACIO D. SANTOS Deputy Commissioner