September 13, 2004
VAT RULING NO. 020-04
Sec. 108 (B) (2)
VAT Ruling No. 005-99, 079-99
Quasha Ancheta Pena & Nolasco Law Offices
Don Pablo Building, 114 Amorsolo St., 1229 Makati City
SUBJECT : New Dynasty International, Inc.
Gentlemen :
This refers to your letter dated September 20, 2001 concerning your request for a reconsideration of VAT RULING NO. 048-2001 dated July 18, 2001 which held that your client, NEW DYNASTY INTERNATIONAL, INC., is subject to the 10% VAT, rather than at zero percent (0%) VAT, on its sale of services to China Airlines as the latter's General Sales Agent in the Philippines. The dispositive portion of the disputed VAT ruling provides:
"Section 108(B)(2) of the said Code is only limited to (1) sale of service by a VAT-registered person, to a 'non-resident foreign client;' and (2) restricted to 'project studies, information services, engineering and architectural designs and other similar services.'
"Since China Airlines Ltd. is a foreign corporation doing business in the Philippines, it is classified as a 'resident foreign corporation,' pursuant to Section 28 (A) (3), NIRC of 1997. Moreover, your services, as...
