October 20, 2004
VAT RULING NO. 027-04
Sec. 28 (B) & 105
Mr. Waldo Q. Flores
Senior Deputy Executive Secretary
Office of the President of the Philippines
Malacañang, Manila
Dear Mr. Flores :
This refers to your letter dated February 24, 2004 requesting an opinion as to whether or not the overhaul repair/maintenance of the spare engine of the F-28 presidential jet is subject to VAT and/or other withholding taxes.
It is represented that your Office is conducting a public bidding on the overhaul repair/maintenance of the spare engine of the F-28 presidential jet; that the subject engine is currently stored at Scotland; that the prospective bidders, both non-resident foreign contractors represented by their respective local agent, have signified their intention to participate in the public bidding; that the engine shall be delivered at the Villamor Air Base, 250th PAW Hangar, Pasay City, Philippines.
In reply, please be informed that Sections 28(B) and 105, of the National Internal Revenue code, as amended, provide as follows:
"Sec. 28. Rates of Income Tax on Foreign Corporations. —
"xxx xxx xxx
"(B) Tax on Non resident foreign corporation —
"(1) In...
