TAXATION II Francisco B.

Gonzalez V
1st semester 2011-2012 IIId

THEVALUEADDEDTAX(SEC105118,NIRC)
PLEASENOTETHATTHISCOVERSONLYSEC.105TO108OFTHENIRC.
PLSCONSIDERTHEDATESOFTHERULINGSASAFACTORINYOUR
STUDIES

RepublicAct8241whichwasincorporatedintoRA8424ortheNational
InternalRevenueCodeof1997.

RepublicAct9238amendingtheprovisionsofSection108,109,121and
122oftheNIRCof1997.

RepublicAct9337amendingtheprovisionsofSection106,107,108,109,
110,111,112,113,114,116oftheNIRCof1997.

Tolentinov.CIRG.R.No.115455.August25,1994

DestinationPrincipleBIRRuling03298(shimizu)
CIRvsBurmeisterWainGR153205Jan222007
CIR vs American Express GR 152609, 29
June 2005
Refutation of destination principle
CIR vs. Placer Dome GR164365 June 8 2007

RevenueRegulation162005ConsolidatedValueAddedTaxRegulationof
2005asamendedbyRevenueRegulation42007.

Sec.105:Personsliable

Distinguishadirecttaxfromanindirecttax.
BIRRuling88243(shiftingofHDMF)
BIRRuling91151purchaseofprimecommoditiesfromCDA;
CIRvs.GotamcoFeb27,1987
Contexvs.CIRGR151135July2,2004

DefinitionofthetermBusiness:Sec22(S);
CIRvs.MagsaysayLinesJuly28,2006GR146984;
RevenueAuditMemorandumOrder186(branchoperationsofforeign
corp.inthephil.;
Imperialvs.Collector,97Phil.992(isolatedtransactions)BIRruling
11398(salebylibertrybroadcastingofmicrowavebackbone);
Vatruling01202(salenotsubjecttoVATwhennotinbusiness);
ManilaPoloClubvs.Meer106Phil.885(whenthereisnoprofit
involved);
 Seesection109asimplementedby162005howeverpleaseseeRR
42007Section14amendingSec.4.1091(B)(1)subsection(p)
BIRRuling/s:27607(whenrealpropertieswerenotconsideredgoods
subjecttovat)
BirRuling02405(realpropertyandpersonalpropertyarenotsubject
tovatundera40(c)(2)exchange;
BIRRuling21806(incidentalsale)
Itadruling2902(proctorandgambleinternationalandphil);
ITADruling9305(onshoreoffshoreproduction);

Sec.106:VATonSaleofGoodsorProperties

RateandBaseofTax
Goodsorproperties
a) RealProperties:SeeRev.Regulation162005asamended
by42007;17498(Saleoffish);VATRuling03701
(leaseofdormitoryspace),RR42007
b) patents,copyrights,designmodel,etc.
12998(royaltypaymentsusphiltaxtreatywarnerstudios
subjecttovat),10498(royaltypaymentsnotsubjecttovat
becauseofpeza)
c) useinthePhilippinesindustrial,commercial,scientific
equipment
d) motionpictures
e) Radio,televisionsatelliteandcabletelevisiontime
BIRruling1498(govtairtimeissubjecttoVAT);3898
(PLDTITtrunklineservices),8859(advertisingagencies
grossbillingssubjecttovat),8885(advertisingagencies)
f) OTHERS
BIRRuling2798(purchaseofelectriccooperativeis
subjecttovatalthoughtheirserviceisvatexempt)
CIRvs.MagsaysayLinesJuly28,2006GR146984;

GrossSellingPrice:Howisitcomputed

ZeroRatedSales:automaticvs.effectivelyzeroratedRR162005Sec
4.1065andSec.4.1066asamendedbyRR42007
a) exportsales:BIRRuling11394(saleofgold):88182;87
170andRMC794(iceandbottledwater);88182(exportof
minerals);CIRvs.ToshibaInformationEquipmentGRNo.
150154Aug9,2005
b) Foreigncurrencydenominatedsale
BIRRulingDA11906(saleofgoodsonlinefordeliveryto
thePhilippines);03398(saletopezaenterprise);RMC74
99(SALETOPEZAENTERPRISES);BIR32188
(ADB);BIRruling6599;CIRvsBurmeisterWain
 GR153205Jan222007;CIR vs American Express
GR 152609, 29 June 2005,
c) exemptionunderspeciallaws:
BIRRulingDA27707(saletopezaenterprises)

Transactionsdeemedsale
BIRRuling06393Merger&consolidations;47293,andSec.4.100.5
Rev.Reg.795butseeRevenueMemorandumCircular1999see162005as
amendedbyRr102011

Determinationofthetax
HowtoshowVATaspartofthebillRRNo.162005

Sec.107VATonImportation

InGeneral:RR162005Sec4.1071

TransfersofGoodsbyTaxexemptentities:RR162005Sec4.1071(c)BIR
Ruling10095(toyotacorrolla)

Sec.108VATonSaleofServices

RateandBaseofTax
SaleorexchangeofserviceRR162005Sec4.1081,2and3
RMC772008
VATruling00388(airlinetickets)
RMC462008

ZeroRatedSales:automaticvs.effectivelyzeroratedRR162005Sec
4.1085andSec.4.1086asamendedbyRR42007
BIRruling37705
BIRRulingDA01205
RMO72006
CIRvs.AmexcoG.R.No.152609 June29,2005
CIRvsBurmeisterWainGR153205Jan222007
CIR vs. Placer Dome GR164365 June 8 2007

ZeroRatedVs.exempttransactions:CIRvs.SeagateTechnology(Phils)Gr.
153866Feb11,2005
Howisitcomputed:RR162005sec.4.1084

InvoicingrequirementsRR162005Sec.4.1131

Changeofstatus:RR162005Sec9.2366
 Determinationofthetax
HowtoshowVATaspartofthebillRRNo.162005

Sec.109ExempttransactionsRR162005Sec.4.1091

Specialtopics
EffectofissuingerroneousreceiptSec.113NIRCRR162005Sec.4.1134
VATreceiptvs.VATinvoiceKepcoPhil.Corpvs.CIRGr181858Nov.24,
2011
JointventuresBIRRuling14000
SubsistencelevelRMC498
WithholdingtaxonVATRR162005Sec4.1142asamendedbyRR42007
WhentopayRR162005Sec4.1141
Royalties10498
ProfessionalServices88250
VatExemptcooperatives12298
Dwellingbelow1.0m15298
TreatmentofVATexempttransactions,suppliespassedontoVATexempt
LeaseofDormitoryspacesVATRuling03701
VAT/PercentagetaxontianggeRRNo.162003
PowerofCommissionertosuspendbusinessoperationsRR162005Sec.
4.1151