(NAR) VOL. 21 NO.1/ JANUARY - MARCH 2010
“SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties-By way of further clarification, the exception provided under Section 119 of the Tax Code, as amended by R.A. No. 9337, is prescribed as follows:
(A) Rate and base of tax. -
The phrase “sale or exchange of services” means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including... services of franchise grantees of electric utilities, telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Sec. 119 of this Code...” (Underscoring and italics supplied)
“SEC. 119. Tax on Franchises - Any provision of general or special law to the contrary notwithstanding, there shall be levied, assessed and collected in respect to all franchises on radio and/or television broadcasting companies whose annual gross receipts of the preceding year do not exceed Ten million pesos (P10,000,000.00) ... and on gas and water utilities..” (Underscoring and italics supplied)In this regard, it is hereby reiterated that the sale of services of franchise grantees except those excluded under the above-quoted Sec. 119 of the Tax Code is subject to VAT.