Tax Exemption of Gross Sales or Receipts from Sale of Condominium Units Valued Below P1 Million

August 11, 1999 BIR RULING NO. 120-99 109 (w) & (z); 116-110-98-120-99 Alakor Corporation 9th Floor, Quad Alpha Centrum 125 Pioneer Street, Mandaluyong City S i r : This refers to your letter dated August 11, 1998, requesting for a reconsideration of BIR Ruling No. 110-98 dated July 7, 1998 which states that "since you are a non-VAT taxpayer, you shall pay a tax equivalent to three percent (3%) of your quarterly gross sales or receipts pursuant to Section 116 of the same Code". dctai In connection therewith, please be informed that after a careful restudy of the aforesaid ruling, this Office finds your contention to be well-taken, Section 116 of the Tax Code of 1997 expressly subjects to the 3% gross receipts tax non-VAT taxpayers whose gross sales or receipts are exempt under Section 109(z) thereof. Clearly, you do not fall under said par. (z) but rather under par. (w) thereof because as represented, the current selling prices of your condominium units are below P1,000,000.00 each and, hence, exempt not only from VAT but also from the 3% gross receipts tax. Accordingly, BIR Ruling No. 110-98 dated July 7, 1998 is hereby modified insofar as it subjects your gross sales or receipts from the sale of condominium units valued at less than P1,000,000.00 each or to the 3% gross receipts tax imposed under Section 116 of the Tax Code of 1997. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue