Reyes Francisco & Associates Law Office

December 16, 2009 BIR RULING [DA-(VAT-114) 785-09] 109 (w), RR 16-2005; DA-481-2005; DA-066-007; VAT Ruling No. 051-02 Reyes Francisco & Associates Law Office Unit 1710 Cityland 10 Tower 1 H.V. dela Costa St., Salcedo Village Makati City Attention: Atty. Pastor M. Reyes, Jr. Gentlemen : This refers to your letter dated June 4, 2009 requesting on behalf of your client, Cosmopolitan Investment Co., Inc. (Cosmopolitan for brevity) for exemption from value-added tax (VAT). Documents submitted show that Cosmopolitan with Tax Identification No. (TIN) 000-659-980-000 is a domestic corporation engaged in housing and land development projects. It is at present selling some of its units in Benavidez Garden Condominium located at Benavidez St., Sta. Cruz, Manila. (attached is the two (2) pages detailed lists of the condominium units and its corresponding lot area and selling price which is below P2,500,000.00 bearing the initial of the herein signatory) In reply, please be informed that Section 4.109-1 (B) (p) (4) of Revenue Regulations (RR) No. 16-2005 provides, viz. : "SEC. 4.109-1. VAT Exempt Transactions. xxx xxx xxx (B) Exempt transactions. Subject to the provisions of Sec. 4.109-2 hereof, the following transactions shall be exempt from VAT. xxx xxx xxx (p) The following sales of real properties are exempt from VAT, namely: CSDTac 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 punished 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 if 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 lot." In view of the fact that Cosmopolitan is primarily engaged in the development and sale of condominium units, the price of which does not exceed the amount of P2,500,000.00, the same falls within the VAT-exempt transactions provided for under Sec. 4.109-1 of RR 16-2005, implementing Sec. 109 (w) of the Tax Code of 1997, as amended by Republic Act (RA) 9337. 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, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service ATTACHMENT Cosmopolitan Investment Co. Inc. Benavidez Garden Condominiums Unit No. Area/Sqm. Selling Price 201 78.00 P2,106.000.00 202 83.00 2,241,000.00 203 40.00 1,080,000.00 205 73.00 1,971,000.00 206 67.00 1,809,000.00 207 84.00 2,268,000.00 208 78.00 2,106,000.00 211 42.00 1,134,000.00 212 42.00 1,134,000.00 213 42.00 1,134,000.00 214 42.00 1,134,000.00 215 42.00 1,134,000.00 301 36.00 972,000.00 302 91.00 2,457,000.00 303 74.00 1,998,000.00 304 79.50 2,146,500.00 307 82.00 2,214,000.00 311 91.50 2,470,500.00 312 83.50 2,254,500.00 313 81.00 2,187,000.00 314 75.00 2,025,000.00 316 42.00 1,134,000.00 317 42.00 1,134,000.00 318 42.00 1,134,000.00 319 42.00 1,134,000.00 320 42.00 1,134,000.00 321 42.00 1,134,000.00 401 36.00 972,000.00 403 74.50 2,011,500.00 407 77.50 2,092,500.00 408 83.00 2,241,000.00 409 84.50 2,281,500.00 410 89.00 2,403,000.00 411 91.50 2,470,500.00 412 83.50 2,254,500.00 413 81.00 2,187,000.00 414 75.00 2,025,000.00 505 35.00 945,000.00 507 77.50 2,092,500.00 508 83.00 2,241,000.00 509 84.50 2,281,500.00 510 89.00 2,403,000.00 513 81.00 2,187,000.00 514 75.00 2,025,000.00 606 87.50 2,362,500.00 608 83.00 2,241,000.00 611 91.50 2,470,500.00 613 81.00 2,187,000.00 703 74.50 2,011,500.00 704 79.50 2,146,500.00 705 35.00 945,000.00 708 83.00 2,241,000.00 711 91.50 2,470,500.00 713 81.00 2,187,000.00 808 83.00 2,241,000.00 811 91.50 2,470,500.00 908 83.00 2,241,000.00 911 91.50 2,470,500.00 1004 79.50 2,146,500.00 1007 77.50 2,092,500.00 1008 83.00 2,241,000.00 1107 77.50 2,092,500.00 1111 91.50 2,470,500.00 1205 35.00 945,000.00 1206 87.50 2,362,500.00 1207 77.50 2,092,500.00 1208 83.00 2,241,000.00 1209 84.50 2,281,500.00 1210 89.00 5,403,000.00 1212 83.50 2,254,500.00 Benavidez Garden Parking Slots Slot# Area/Sqm. Selling Price G-3 12.50 P350,000.00 G-4 12.50 350,000.00 G-5 12.50 350,000.00 G-7 12.50 350,000.00 G-8 12.50 350,000.00 G-9 12.50 350,000.00 G-11 12.50 350,000.00 G-13 12.50 350,000.00 G-15 12.50 350,000.00 G-16 12.50 350,000.00 G-17 12.50 350,000.00 G-18 12.50 350,000.00 G-19 12.50 350,000.00 G-26 12.50 350,000.00 G-29 12.50 350,000.00 G-30 12.50 350,000.00 B-1 12.50 300,000.00 B-2 12.50 300,000.00 B-3 12.50 300,000.00 B-5 12.50 300,000.00 B-6 12.50 300,000.00 B-7 12.50 300,000.00 B-8 12.50 300,000.00 B-9 12.50 300,000.00 B-10 12.50 300,000.00 B-11 12.50 300,000.00 B-12 12.50 300,000.00 B-13 12.50 300,000.00 B-14 12.50 300,000.00 B-15 12.50 300,000.00 B-16 12.50 300,000.00 B-17 12.50 300,000.00 B-18 12.50 300,000.00 B-19 12.50 300,000.00 B-20 12.50 300,000.00 B-21 12.50 300,000.00 B-22 12.50 300,000.00 B-23 12.50 300,000.00 B-27 12.50 300,000.00 B-28 12.50 300,000.00 B-30 12.50 300,000.00 B-31 12.50 300,000.00 B-32 12.50 300,000.00 B-40 12.50 300,000.00 B-41 12.50 300,000.00 B-42 12.50 300,000.00 B-43 12.50 300,000.00 B-44 12.50 300,000.00 B-45 12.50 300,000.00