Summary
RMC No. 76-2008 recognizes Makati Development Corporation as the construction agent of the U.S. Embassy for building and renovation projects, and amends sections of RMC No. 31-2006.
Key points
- Recognition of the construction agent. Under Section 4 of RMC No. 31-2006, the BIR recognizes Makati Development Corporation (MDC) as the U.S. Embassy’s Construction Agent, as declared in Note Verbale No. 0488 dated 14 April 2008. MDC may make purchases for the Embassy project and continues to be taxed under the National Internal Revenue Code of 1997, as applicable.
- VAT zero-rating. MDC may buy supplies, goods and services locally for the Embassy and avail of VAT exemption at the point of sale, using a BIR Certification that cites the Embassy’s VAT Exemption Certificate. Sales of goods and services to MDC for the covered projects are zero-rated, and the Circular serves as sufficient compliance with the prior approval requirement of Revenue Regulations No. 16-2005.
- Review of invoices. A U.S. Embassy representative reviews the invoices and annotates the Embassy’s certification that purchases relate to the project. Certified copies and a summary are submitted to the International Tax Affairs Division through the DFA, which forwards the invoices monthly to Revenue District Office No. 50, Pasay City for verification.
Who is affected
- Makati Development Corporation
- Suppliers selling to the construction agent for the covered U.S. Embassy projects
Deadlines and effectivity
- Zero-rating basis effective as of the date of issuance of the Circular
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.