Kensington Place Condominium Corporation

July 22, 2009 BIR RULING [DA-(C-137) 393-09] DA031-06 Kensington Place Condominium Corporation 1st Avenue cor. 29th Street Crescent Park West Bonifacio Global City Taguig City Attention: Ms. Nelly Yu President Gentlemen : This refers to your undated letter requesting for a ruling that the condominium/association dues collected by the said corporation from the unit owners and tenants are not subject to income tax and consequently to withholding tax. DHcTaE It is represented that the Kensington Place Condominium Corporation is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission (SEC); and that its primary purpose for which it was organized is to own and hold title to, manage, operate, concession out, lease out, use, improve, develop, or otherwise administer the facilities and common areas pursuant to Republic Act No. 4726. 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 its purpose(s) i.e. , to protect and safeguard the welfare of the owners, lessees and occupants; provide utilities and amenities for its members, and from which the Corporation could notrealize any gain or profit as a result of its receipt thereof, are not includible in said corporation's gross income. Accordingly, the same are not subject to income tax and consequently to withholding tax. Moreover, inasmuch as the corporation does not sell, barter, exchange, nor lease any goods or property and neither does it render service for a fee but merely implements the administration of the required services to collect the association dues from the unit owners pursuant to its corporate purpose(s) as trustee of the fund thereof, it is 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