BIR Ruling [DA-126-00]

February 24, 2000 BIR RULING [DA-126-00] 30 71-97 Wack Wack Condominium Corp. Cacho-Gonzales Building 101 Aguirre Street, Legaspi Village Makati City Attention: Ms . Raquel L . Gonzalez President Gentlemen : This refers to your letter dated June 6, 1997 requesting for a certificate of exemption in favor of your association. It is represented that Wack Wack Condominium Corporation is a non-stock, non-profit organization registered with the Securities and Exchange Commission under SEC Registration No. 51661 dated December 17, 1982; that your corporation is administered by a Board of Directors; that no income or profit inures to the benefit of any member; and that it is your opinion that your corporation enjoys tax exemption under Republic Act No. 4726 and other pertinent laws of the Philippines. In support of your request, you submitted photocopies of the following documents: 1) Tax Identification Number; 2) Articles of Incorporation of Wack Wack Condominium Corporation; and 3) By-Laws of Wack Wack Condominium Corporation We regret to inform you that your request for tax exemption is denied for lack of legal basis. A condominium corporation or homeowners association is not among those enumerated as exempt from payment of income tax under either Section 30 of the Tax Code of 1997 or Republic Act No. 4726. HaTSDA In this connection, you are further advised that the collections being paid by your tenants for the maintenance of common areas of the condominium building is not subject to income tax since no income was generated. However, the sale of janitorial services and other related services shall be subject to value-added tax but the act of "collection" by the association from the tenants of their respective shares in the payment of said services is not itself subject to VAT. For this purpose, any input tax evidenced by a VAT invoice or official receipt issued by a VAT registered person in accordance with Section 113 of the Tax Code of 1997 is creditable against the output tax upon payment of such service. (BIR Ruling No. 71-97 dated December 4, 1997) Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group