March 15, 2007
VAT RULING NO. 003-07
Sec. 110A 000-00
Basic Holdings Corporation
Fortune Ave., Barangay Fortune
Marikina City
Attention: Ms. Juanita Tan Lee
Corporate Secretary
M a d a m :
This refers to your letter dated January 5, 2007 wherein you requested a confirmation of your opinion that the input taxes on the importation and local purchase of parts and spare parts for the construction and maintenance of your telecommunication network is not subject to amortization provided for under Section 110 of the Tax Code.
It is represented that your company, Basic Holdings Corporation, is putting up a telecommunication network (referred to as "The Project") to be used by the Lucio Tan Group of Companies. The Project is a digital telephone interconnection between and among the different companies comprising the Group. The Project will ultimately be booked as part of Plant, Property and Equipment upon its completion.
The parts of the Project are sourced from outside and within the Philippines. The purchase and shipment is on a staggered basis which started last December of 2004. Spare parts are also imported, along with the other...
