Grand Monaco Estate Developers, Inc.

July 28, 2008 BIR RULING [DA-(VAT-010) 078-08] RR 16-2005 Grand Monaco Estate Developers, Inc. 49 Sta. Ana, San Roque Marikina City Attention: Mr. Reynaldo A. Carpio, Ph. D. President Gentlemen : This refers to your letter dated June 3, 2008 requesting for exemption from the payment of Value-Added Tax (VAT). It is represented that Grand Monaco Estate Developers, Inc. (Grand Monaco) is a corporation duly organized and existing under the laws of the Philippines; that it is engaged in the construction and real estate development; that it is registered with the Securities and Exchange Commission on November 5, 2003 with SEC # CS200340761; that it is also registered with the Bureau of Internal Revenue with BIR Registration No. 3RC0000224526 with TIN 227-613-621-000; and that it is also engaged in selling the developed properties valued within the VAT exempted price. In reply, please be informed that Sec. 4.109-1 (B) (1) (p) (4) of Revenue Regulations No. 16-2005, as amended, provides viz.: "(B) Exempt transactions. xxx xxx xxx (p) The following sales of real properties are exempt from VAT, namely: aDHCEA xxx xxx xxx (4) Sale of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,000.00) and below, or house & lot and other residential dwellings valued at Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below where the instrument of sale/transfer/disposition was executed on or after July 1, 2005; Provided, That not later than January 31, 2009 and every three (3) years thereafter, the amounts stated herein shall be adjusted to its present value using the Consumer Price Index, as published by the National Statistics Office (NSO); Provided, further, that such adjustment shall be published through revenue regulations to be issued not later than March 31 of each year; If two or more adjacent residential lots are sold or disposed in favor of one buyer, for the purpose of utilizing the lots as one residential lot, the sale shall be exempt from VAT only of the aggregate value of the lots do not exceed P1,500,000.00. Adjacent residential lots, although covered by separate titles and/or separate tax declarations, when sold or disposed to one and the same buyer, whether covered by one or separate Deed of Conveyance, shall be presumed as a sale of one residential unit." Considering that Grand Monaco is engaged in the selling of developed properties, valued at One Million Five Hundred Thousand Pesos (P1,500,000.00) and below in case of sale of residential lot; Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below, in case of house and lot and other residential dwellings or at the aggregate value not to exceed P1,500,000.00 in case two or more adjacent residential lots are disposed of in favor of one buyer, Grand Monaco is exempt from the payment of VAT pursuant to Sec. 4.109-1 (B) (1) (p) (4) of Revenue Regulations No. 16-2005, as amended. 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. HSacEI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service