Professional Documents
Culture Documents
Sec. 105-000-00-007-99
Gentlemen :
VAT is a direct tax on the seller of goods, property or services while an indirect
tax on the part of the buyer. Section 105 of the National Internal Revenue Code, as
amended by R.A. No. 7716, and as re-numbered by R.A. No. 8424 provides:
"The value-added tax is an indirect tax and the amount of tax may be shifted or
passed on to the buyer, transferee or lessee of the goods, properties or services. . .
."
Thus, the aforesaid VAT ruling on the tax exemption of subcontactors engaged in
petroleum operations in the Philippines may only apply to taxes on their sale of goods,
property or services. However, it does not include the value-added taxes due from and
which are indirectly passed on by their VAT-registered suppliers of goods, properties or
services.
In connection with the contention that FORUM is also exempt from documentary
stamp taxes under the aforesaid law and FIRB Resolution, Section 173 of the Tax Code
of 1997 provides, in part: "Provided, That whenever one party to the taxable document
enjoys exemption from the tax herein imposed, the other party who is not exempt shall
be the one directly liable for the tax." Thus, even granting that FORUM is exempt from
documentary stamp tax, the tax on any taxable document in which FORUM is a party
shall nevertheless be paid by the other party, unless such other party is also exempt
from documentary stamp tax pursuant to the provision of any existing law. cdasia
This ruling is being issued on the basis of the foregoing facts as represented.
However, if upon investigation it will be disclosed that the facts are different, then this
ruling shall be considered null and void.
By: