National Housing Authority

May 26, 2010 BIR RULING [SH-(008) 029-10] Sec. 20 of RA 7279; BIR Ruling No. 104-96; n BIR Ruling No. [SH(013)128-09] National Housing Authority Quezon Memorial Elliptical Circle Diliman, Quezon City Attention: Arch. Virginia R. Domingo Manager Southern Luzon and Bicol Region Gentlemen : This refers to your letter dated December 21, 2009 requesting in behalf of M.Y. Reyes Builders & Development Corporation, for exemption from the payment of project-related taxes particularly the value-added tax pursuant to Republic Act (R.A.) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992." It is represented that M.Y. Reyes Builders & Development Corporation with TIN 201-792-849-000 is the contractor of the socialized housing project of the National Housing Authority under the Livelihood, Production and Training Center at Southville 4 Housing Project, Brgy. Caingin, Sta. Rosa, Laguna. In reply, please be informed that Section 20 of RA No. 7279 provides as follows: "Sec. 20. Incentives for the Private Sector Participating in Socialized Housing. To encourage greater private sector participation in socialized housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector: xxx xxx xxx "(d) Exemption from the payment of the following: "(1) Project related income taxes; ISDHEa "(2) Capital gains tax on raw lands used for the project; "(3) Value-added tax for the project contractor concerned . . ." Accordingly, the contractor of the Livelihood, Production and Training Center which is a component of the socialized housing project under R.A. No. 7279 is exempt from the payment of value-added tax pursuant to the aforecited provision, hence, it shall only issue Non-VAT official receipts on its gross receipts from the NHA. However, purchases of goods/articles by the project contractor shall be subject to value-added tax, even if the said purchases are to be used for the socialized housing project. (BIR Ruling No. 104-96 dated October 14, 1996, and SH(013)128-2009 dated February 25, 2009) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MARISSA O. CABREROS OIC-Assistant Commissioner Legal Service n Note from the Publisher: Written as VAT Ruling No. 104-96" in the original document.