UCPB Building Condominium Corporation

November 27, 2008 BIR RULING [DA-(C-146) 475-08] S30; 27 (D) (1); DA 629-07 UCPB Building Condominium Corporation UCPB Building, 7909 Makati Ave. Makati City Attention: Barrie Torres Property Manager Gentlemen : This refers to your letter dated July 12, 2005, requesting for exemption from the payment of income tax and filing of the corresponding income tax return under Section 30 of the Tax Code of 1997, as amended. EAISDH Documents submitted to this Office disclosed that UCPB Building Condominium Corporation is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission under SEC Registration No. 84207 dated January 29, 1979; and that the purpose for which UCPB Building Condominium Corporation is incorporated is to own or hold title to the common areas in the condominium project known as the UCPB Building Project. In reply, please be informed that UCPB Building Condominium Corporation's receipts of corporation dues, and other assessments/charges collected from the members, which are merely held in trust and which are to be used solely for administrative expenses in implementing its purposes i.e ., to operate, manage and maintain the said condominium project, to defray the costs, expenses and losses of the condominium, and from which UCPB Building Condominium Corporation could not realize any gain or profit as a result of its receipt thereof, are not includible in said corporation's gross income. Hence, the same are not subject to income tax and consequently, to the expanded withholding tax. (BIR Ruling No. 103-94 dated May 16, 1994; DA-470-98 dated November 3, 1998). Pursuant to Section 105 of the 1997 Tax Code, as amended, value-added tax (VAT) is collected upon any person, who in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services. The phrase "in the course of trade or business" means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless or whether or not the person engaged therein is a non-stock, non-profit private organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or government entity. Considering that 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 purposes as "trustee" for the fund thereof, it is not subject to VAT on such activity. (VAT Ruling No. 026-97 dated April 1, 1997) HEacAS This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service