VAT Ruling No. 054-90

February 28, 1990 VAT RULING NO. 054-90 102 (a)-556-88-054-90 Ayala Land Inc. Makati Stock Exchange Building Ayala Ave. Makati Metro Manila Attention: Mr . Renato Marzan Asst . Corporate Secretary S i r s : This refers to your letter dated September 19, 1989 wherein you represented that your company is the owner of parcels of lands which are used as parking spaces under the following situations: (a) Payment of parking fee on an hourly basis to meet the requirements of shoppers in the commercial center. (b) Payment of fees for the lease of car park spaces for a term of one (1) year (subject to renewal) to certain tenants of adjacent buildings. In reply, please be informed that the operation of parking spaces under the above situations is subject to 10% VAT pursuant to Section 102(a) of the Tax Code as amended. This finds support in VAT Ruling No. 556-88. On the other hand, if the car park space is within the area of the building for lease to occupants of said building and that payment thereof is part of the written lease contract, then the income from the parking activity is exempt from VAT since it forms part of the activity of leasing real property which, under Section 103(q) of the Tax Code, as amended, is VAT exempt. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue