VAT Ruling No. 002-96

May 9, 1996 VAT RULING NO. 002-96 Section 100-000-002 Ms. Rose D. Martinez # 1 M Road, Concepcion Rosario, La Union M a d a m : This refers to your undated letter received by our office on January 23, 1996 asking if real properties are covered by the EVAT law and, if so, how is EVAT applied to the sale of these properties. In reply, please be informed that pursuant to Section 100 of the National Internal Revenue Code, as amended by Republic Act No. 7716, with respect to sale of real properties, VAT will apply only if the real properties are held primarily for sale to customers or held for lease in the ordinary course of trade or business. The mechanics of application of the EVAT on real property transactions are detailed in the hereto enclosed copies of Revenue Regulations No. 7-95, otherwise known as the Revised Consolidated VAT Regulations, and Revenue Memorandum Circular No. 3-96. dctai Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue