Basis of the Amount of the Annual Fixed Tax Payable by Real Estate Dealers

April 21, 1959 BIR RULING NO. 208-59 The Regional Director Regional District No. 5 Bureau of Internal Revenue San Pablo City S i r : Reference is made to your letter dated March 11, 1959 requesting clarification and/or ruling on the following: "A subdivision entity is engaged in selling real property to others by installment sales. The question propounded is where to base the annual fixed tax (C-8) as a real estate dealer, i.e., whether on (1) gross installment sales which include amounts already collected and still to be collected, or (2) on the gross profit on installment sales, or (3) on the realized gross profits?" In reply thereto, you are informed that the amount of the annual fixed tax payable by real estate dealers is based on their actual income from buying, selling, exchanging, leasing or renting property. In the case presented, the actual installments received by the subdivision entity during the preceding year, without deduction, is the basis of the tax payable by it. Please be informed, in this connection, that the minimum aggregate income of P4,000.00 for the preceding year required before subjecting the taxpayer to the annual C-8 tax of P150.00 applies only to owners of rental properties and not to dealers in real estate. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue