Bright Centro Plaza Condominium Corporation

November 4, 2009 BIR RULING [DA-(C-255) 650-09] DA031-06 Bright Centro Plaza Condominium Corporation No. 49 Scout Madrinan corner Scout Torillo Streets Barangay South Triangle Quezon City Attention: Mr. Domingo C. Beltran, Jr. President Gentlemen : This refers to your letter dated July 30, 2009 requesting 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 Bright Centro Plaza Condominium Corporation are not subject to income tax and consequently to withholding tax. It is represented that the Bright Centro Plaza Condominium Corporation is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission (SEC) with TIN 222-603-004-000; and that its primary purpose for which it was organized is to own or hold title to the land of, and the common areas in, the condominium project and identified as SHB Centro Plaza which has been constituted pursuant to Republic Act (RA) 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 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) SDHTEC 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