The BIR revoked its previous ruling in [DA-(VAT-057) 552-08] dated December 18, 2008 stating that services provided by hotels to persons engaged in international airport operations is subject to the value-added tax at zero percent (0%) rate.
The tax authority’s position with regard to this is now elucidated in BIR Ruling 099-2011 dated April 6, 2011 stating that the services provided by the Hotel to its clients engaged in international air transport operations pertain to room accommodations and food and beverage services. As they are rendered within the Hotel’s premises, they have no direct connection with the transport of goods or passengers, and as such, they cannot be considered as services directly attributable to the transport of goods and passengers from a Philippine port directly to a foreign port entitled to zero-rating, but is appropriately subject to 12% VAT.
(Revenue Memorandum Circular No. 31-2011, August 4, 2011)
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