Tuesday, April 03, 2007 Taxnotes: Payment of VAT of scrap buyers
THE sale of scrap metals by a Philippine Export Zone Authority (Peza)-registered enterprise to a buyer from the customs territory is treated as a technical importation by the buyer. Hence, the buyer is considered as the importer liable for the value-added tax (VAT) on importation.
The payment of the VAT on importation should be made by the buyer directly to the Bureau of Customs (BOC) as the agency tasked to collect the VAT on importation.
The Peza enterprise is not required to impose the VAT on its sale of scraps to customs territory buyer.
However, the Peza company should be furnished a copy of the receipt issued by the BOC for the VAT payment. (BIR Ruling DA-031-2007, January 19, 2007)
The term “customs territory” shall mean the national territory of the Philippines outside of the proclaimed boundaries of the ecozones except those areas specifically declared by other laws and/or presidential proclamations to have the status of special economic zones and/or free ports. (Source: Punongbayan & Araullo)
