VAT Exemption on the Sale of Real Property by Real Estate and Subdivision Lot Developers
BIR Ruling No. 362-88 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Jul 28, 1988
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July 28, 1988 BIR RULING NO. 362-88 99 190-88 362-88 Gentlemen : This refers to your letter dated March 8, 1988 stating that you have several clients who are real estate dealers, subdivision lot developers, etc., whose main business is developing subdivisions, building homes and then selling them to the public. You want to know whether the sale of real property by real estate and subdivision lot developers is subject to VAT. In reply, please be informed that under Section 99 of the Tax Code, as amended by Executive Order No. 273, only sale of goods is subject to the value-added tax. "Goods" means any movable, tangible objects which are appropriable or transferable [Section 2(p), Revenue Regulations No. 5-87] and does not include real properties. Accordingly, your clients who are engaged in selling real properties are not subject to the value-added tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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