BIR Ruling [UN-051-A-95]

February 7, 1995 BIR RULING [UN-051-A-95] Mr. Justo M. Ortiz Suite 101 First Cityland Condominium 119 Rada St., Legaspi Village Makati, Metro Manila S i r : This refers to your letter dated April 18, 1994 stating that you are engaged in the real estate business as a single proprietorship since December 1993 pursuant to Department of Trade and Industry Real Estate License No. 1715 (R) and House and Land Use Regulatory Board Registration No. 94-1400. Based on the foregoing, you now request for a confirmation of your opinion that your business qualifies as a practice of profession since only graduates of a four-year college course are qualified to take up the licensure examination for real estate broker as embodied in Department of Trade and Industry (DTI) Ministry Order No. 39, series of 1985; hence, exempted from VAT under Section 103(r). In reply, please be informed that pursuant to Section 102 of the Tax Code, as amended, real estate brokers are subject to the 10% VAT. The provision of Section 103(r) of the same Code to the effect that professionals are exempt from VAT is not applicable to brokers who are specifically mentioned among those liable to VAT under Section 102(a) of the Tax Code, as amended. Moreover, the profession that is exempt from VAT within the contemplation of Section 103(r) of the Tax Code, as amended refers to a regular course of study which requires the passing of a Government examination for the practice thereof. [VAT Ruling No. 102(a)/000-00/077-92 dated June 2, 1992] Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)