Exemption of the Lease of a Slot of Parking Space from VAT
BIR Ruling No. 231-88 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Jun 3, 1988
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June 3, 1988 BIR RULING NO. 231-88 103 (q) 000-00 231-88 Gentlemen : This refers to your letter dated April 29, 1988 stating that your client, FGU Insurance Agency, Inc. has an existing contract with Ayala Property Management Corporation (APMC) for the lease of one slot of parking space located at Valero St., Makati, Metro Manila. You now request for an opinion as to whether APMC, a VAT-registered entity, can charge your client an additional amount of P46.20 for value-added tax on the aforesaid lease. In reply, please be informed in the negative. Since the leasing of real property is exempt from the value-added tax (Section 103(q), Tax Code, as amended), APMC as lessor, cannot separately bill any output tax to your client pursuant to Section 9(a) of Revenue Regulations No. 5-87 implementing Executive Order No. 273. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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