BIR Ruling No. 335-2020

REPUBLIC OF THE PHILIPPINES

3 BUREAU OFINTERNAL REVENUE DEPARTMENT OF FINANCE Quezon City

IPPIN

Bureau of Internal Revenue Ruling

National Internal Revenue Code of 1997,as amended. R.A. No. 8282 R.A. No. 10963 0335-2020 VAT - Tel. Nos. 926-55-36 / 927-09-63 Person to Contact: Chief, Law Division

Date: JUN 1 6 2020

SOCIAL SECURITY SYSTEM

East Avenue, Diliman, Quezon City

Attention: AURORA CRUZ IGNACIO President and CEO

Madam:

This is to acknowledge your letter dated May 8, 2017 requesting for

confirmation on the tax exempt status of the Social Security System (SSS) from the

payment of Value Added Tax (VAT)

It is established that SSS is a government agency created under Republic Act

(R.A.) No. 1161, as amended by R.A. No. 8282. whose primary function is to

testablish, develop, promote and perfect a sound viable tax-exempt social security

system suitable to the needs of the people throughout the Philippines which shall

promote social justice and provide meaningful protection to members and their

beneficiaries against the hazards,of disability, sickness, maternity, old age, and death

and other contingencies resulting in loss of income or financial burden."

Section 16 of RA No. 8282 further states that:

"SEC. 16. Exemption from Tax. Legal Process and Lien. - All laws

to the contrarv notwithstanding. the SSS and all its assets and properties.

all contributions collected and all accruals thereto and income or

investment earnings therefrom as well as all supplies, eauipment. papers

or documents shall be exempt from anv tax. assessment. fee, charge, or

customs or import dutv: and all benefit pavments made by the SSS shall

likewise be exempt from all kinds of taxes. fees or charges. and shall not

be liable to attachments. garnishments. levv or seizure bv or under anv

legal or eauitable process whatsoever.either before or after receipt bv the

person or persons entitled thereto. except to pav anv debt of the member

to the SSS. No tax measure of whatever nature enacted shall applv to the

SSS, unless it expressly revokes the declared policy of the State in Section

' Social Security Law

VAI-0335-2020

JUN 1 6 2020

Social Security System -- Value Added Tax

Puge2of2

2 hereofgranting tax-exemption to the SSS. Anv tux assessment imposed

ugainst:the SSS shull he null and void. (As amended by Sec. 9, P.D. No.

24, S.1972; and Sec. 14, P. D.No. 735, S.1975)

The policy of the State to exempt SSS from any and all kinds of taxes as

enunciated in Section 2 and further reiterated in Section 16 of R.A. No. 8282 is

explicitly stated. The above-quoted provision further provides that any tax assessments

against SSS are null and void.

However, with the passage of R.A. No. 10963, entitled as "Tax Reform for

Acceleration and Inclusion"(TRAIN LAW), Sections 2 and 16 of R.A. No.8282, insofar as V AT exemption is concerned are declared repealed2. Hence, starting January "1, 2018, SSS is no longer exempt from the payment of'VAT.

To ease the removal of the VAT exemption, the TRAIN Law states that "Provided, That the VAT obligations of government-owned and -controlled

corporations, state universities and colleges, and other government instrumentalities

whose VAT exemption has been repealed under this Act shall be chargeable to the Tax

Expenditure Fund (TEF) provided for in the annual General Appropriations Act...

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.

Very truly yours,

ewaa

CAESAR R. DULAY Commissioner of Internal Revenue

034284 K1-ASB/JESS K1-FR-17-0907

Sec. 86(q) of R.A.No. 10963.

Sec.86 ofR.A.No.10963.