Siazon Siazon & Salinas

June 16, 2008 BIR RULING [DA-365-08] DA031-06 Siazon Siazon & Salinas 20-A One Burgundy Plaza 307 Katipunan Road, Loyola Heights Quezon City Attention: Atty. Richie I. Esponilla Gentlemen : This refers to your letter dated September 21, 2007 requesting on behalf of your clients, CitiTower CondoClub, Inc., Citi Center Condominium Corporation and Citibank Square Condominium Corporation, for a ruling that the condominium dues collected by the said corporations are not subject to income tax and consequently to withholding tax. It is represented that CitiTower CondoClub, Inc., Citi Center Condominium Corporation and Citibank Square Condominium Corporation are non-stock, non-profit corporations duly registered with the Securities and Exchange Commission (SEC); that their primary purpose for which they were organized is to own and hold title to, manage, operate, concession out, lease out, use, improve, develop, or otherwise administer the Auxiliary Services Spaces of the said Corporations pursuant to Republic Act No. 4726; and that the tenants/members of the said corporations regularly withhold two (2) percent from their dues for tax payments. In reply thereto, please be informed that the association dues, membership fees and other assessment/charges collected from the members, which are merely held in trust and which are to be used solely for administrative expenses in implementing their purpose(s) i.e. , to protect safeguard the welfare of the owners, lessees and occupants; provide utilities and amenities for their members, and from which the Corporations could not realize any gain or profit as a result of their receipt thereof are not includible in said corporations' gross income. Accordingly, the same are not subject to income tax and consequently to withholding tax. Moreover, inasmuch as the corporations do not sell, barter, exchange, nor lease any goods or property and neither do they render service for a fee but merely implement the administration of the required services to collect the association dues from the unit owners pursuant to their corporate purpose(s) as trustees of the fund thereof, they are not subject to the value-added tax on such activity. (BIR VAT Ruling No. 026-97 dated April 1, 1997) 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, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service