April 14, 1988

VAT RULING NO. 087-88

100-000-00-087-88
MANN (ASIA) Resources Dev't., Corp.
V.V. Soliven Bldg. I
EDSA, Greenhills
San Juan, Metro Manila
Attention: Mrs. Estelita Madlansacay
Treasurer
Sirs:
This refers to your letter dated March 22, 1988 requesting information on the
applicability of the value-added tax on the following businesses: cdasia
(1)

Review classes for nursing, CGFNS, nutrition and midwifery;

(2)

Recruitment services; and

(3)

General merchant.

In reply, please be informed that all of the above-mentioned activities are

subject to VAT pursuant to Sections 100 and 102 of the Tax Code, as amended
by E. O. No. 273. For tax credit purposes, the input taxes for the purchase of
goods for use as supplies in connection with trade or business or as materials
in the sale of services can be claimed against your output law.
In the computation of the VAT on recruitment services, the basis of the tax is
the amount of placement fee which will not include reimbursement of expenses
which shall be limited to fees for passport/visa, medical examination,
clearances and inoculation provided that these expenses are supported by
receipts issued by the supplying company or government agency in the name of
the applicant. On the other hand, the agency is required to pay the 10% VAT on
the entire amount of placement fee if the abovementioned reimbursable
expenses are supported by receipts issued in the name of the agency. cda
Very truly yours,
BIENVENIDO A. TAN, JR.
Commissioner of Internal Revenue