VAT Ruling No. 106-89

April 21, 1989 VAT RULING NO. 106-89 Patio Homes Phils., Inc. Unit No. 1 Plaza Real Townhomes 16 West Riverside Street SFDM, Quezon City Attention: Mr. Rene V. Palma President Gentlemen : This has reference to your letter dated October 5, 1988 requesting for a ruling on whether or not real estate developers and dealers are subject to the value-added tax (VAT). In reply, please be informed that the sale of real estate is not subject to VAT since real estate is not considered as "goods" which are subject to VAT pursuant to the definition of the term under Sec. 2 (p) of Revenue Regulations No. 5-87, which pertains only to movable objects. Furthermore, a duly registered real estate developer is exempt from VAT if he undertakes the development of his own real estate. Hence, you are exempt from VAT and in order to avoid further payments of the VAT on your future gross receipts/sales, you may apply for the cancellation of your VAT registration with our Revenue District Office where your firm has been registered. Moreover, your VAT payments for the previous two quarters which are considered as erroneous payments, can be claimed as a refund through an application in writing filed with the Appellate Division of our Legal Office. Please be guided accordingly. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue