SJB Townvilla Condominium Corporation

November 4, 2009 BIR RULING [DA-(C-254) 649-09] SJB Townvilla Condominium Corporation No. 8 Scout Tuazon Barangay Obrero Quezon City Attention: Ms. Luisa A. Caleon President Gentlemen : This refers to your letter dated August 12, 2009 stating that the SJB Townvilla Condominium Corporation is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. A199912634 dated November 29, 1999; that it is organized to own or hold title to the land of, and the common areas in, the condominium project known and identified as SJB Townvilla; and that the association's receipts of the association dues and other assessments/charges collected from the members, which are merely held in trust and used solely for the administrative expenses in order to protect and safeguard the welfare of the owners, lessees and occupants of the property, provide utilities and amenities, the maintenance of services and management, and from which the association could not realized any gain or profit as a result of its receipts thereof, are not includible in said association's gross income. Based on the foregoing representations, you now request for a ruling that the condominium/association dues, which include power, water and miscellaneous fees as well as membership fee, insurance premium and real property taxes collected by SJB Townvilla Condominium Corporation are not subject to income tax and consequently to withholding tax. 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 Corporation 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 corporation does not sell, barter, exchange, nor lease any goods or property and neither does it 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) . aIHCSA 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