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Mesdames :
This refers to your letter dated October 7, 2008 requesting, in effect, exemption
from the payment of value-added tax (VAT) on the shipment of 1 x 20' and 1 x 40'
container, set to contain two (2) units of elevator, by The Local Superior of the
Religiosas Siervas De Jesus De La Caridad, Inc. or popularly known as the "Servants
of Jesus of Charity", a non-stock, non-profit religious organization exempt from the
payment of income tax pursuant to Section 30 (E) of the Tax Code of 1997, as
amended. IcCDAS
In reply thereto, please be informed that the exemption provided for under
Section 30 (E) of the Tax Code of 1997, as amended, pertains only to income tax.
Thus, business taxes, such as the value-added tax, are not covered by the said
exemption. If the Servants of Jesus of Charity will engage in the regular conduct or
pursuit of a commercial or economic activity, including transactions incidental to its
purposes, it will be subject to VAT. The above exemption from income tax does not
extend to activities conducted by religious organizations involving sale of goods and
services which are subject to the 12% VAT imposed under Section 106 of the same
Code. (BIR Ruling No. 248-88 dated June 6, 1988; BIR Ruling No. DA-040-02 dated
March 7, 2002; and BIR Ruling No. S30-027-2003 dated November 21, 2003).
This ruling is being issued on the basis of the foregoing facts as represented.
However, if upon investigation, it will be disclosed that the facts are different, then
this ruling shall be considered null and void.