BIR Ruling No. 288-2016

REPUBLICOFTHE PHILIPPINES

DEPARTMENT OFFINANCE

S BUREAU OF INTERNAL REVENUE Quezon City

Section 20 of RA 7279

BIR Ruling No. 063-14

#288-2016 6-27-2016

NATIONAL HOUSING AUTHORITY Diliman, Quezon City Quezon Memorial Elliptical Road

Attention: AR. SUSANA V. NONATO

Head,NPIT-A Regions IV-B,V,VI& VII

Gentlemen:

7279, otherwise known as the "Urban Development and Housing Act of 1992" Bolanon. Sagay City, Negros Occidental. under the Yolanda Permanent Housing Project of the National Housing Authority (NHA) pursuant to Republic Act (R.A.) No of Tax Exemption for the socialized housing project,Lizares Village 2 located at Brgy This refers to your letter dated May 16, 2016 requesting issuance of Certificate

Brgy. Bolanon. Sagay, Negros Occidental - 379 Housing Units" with a contract price Award dated December 29, 2015 to Opusland, Inc./R.U. Aquino Const. & Devt. Corp Housing Units under the NHA's Yolanda Permanent Housing Program Located at of Securities and Exchange Commission (SEC) with SEC Company Registration No. - Joint Venture for the project, "Procurement of Fully Developed Lots and Completed domestic corporation duly organized under the Philippine laws and registered with the organized under the Philippine laws and registered with the Securities and Exchange Commission (SEC) with SEC Company Registration No. Aquino Construction and Development Corporation (TIN) Documents submitted show that Opusland, Inc. is a domestic corporation duly ; and that the NHA (TIN: has issued a Notice of that R.U Tis also a

and Lot Packages, Lizares Village 2, Brgy. Bolanon, Sagay, Negros Occidental, was executed between NHA and Opusland, Inc./R.U. Aquino Const. & Dev't. Corp. - Joint Venture, whereby the latter has committed to deliver Three Hundred Seventy Nine (379) units (House and Lot Package) for a price of To give effect to the Notice of Award, a Contract for the Procurement of House The scope of

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Construction. works under the project includes Survey Works, Earthworks, Road Works, Drainage Works, Water System, Electrical Power Lines, Miscellaneous Works and Housing

No.7279, pertinent portions of which state that: In reply,please be informed that pursuant to Section 20 of Republic Act (RA)

benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector: socialized housing and further reduce the cost of housing units for the Housing. "Sec. 20. -- To encourage greater private sector participation in Incentives for Private Sector Participating in Socialized

XXX XXX XXX (d Exemption from the payment of the following.

3) (2) ( Capital Gains Tax on raw lands used for the project; Value-added tax for the project contractor concerned:" Project-related income taxes;

X.XX XXX XXX Section 3 (r) of R.A. 7279 defines "socialized housing" as follows:

benefits in accordance with the provisions of this Act;" liberalized terms on interest payments, and such other sites and services development, long-term financing. undertaken by the Government or the private sector for the underprivileged and homeless citizens which shall include projects covering houses and lots or homelots only "(r) "Socialized housing" refers to housing programs and

063-14 dated February 19, 2014) Negros Occidental, shall be exempt from project-related income taxes. (BIR Ruling No. necessary construction components, in Lizares Village 2, Brgy. Bolanon, Sagay, Occidental, a housing project under the socialized housing program of the NHA pursuant to R.A. 7279, in connection with its Yolanda Permanent Housing Project, the income directly realized by Opusland, Inc./R.U. Aquino Const. & Dev't. Corp. - Joint Venture from the construction of 379 Housing Units (House and Lot Package) with its the construction of the 379 Housing Units (House and Lot Package) with its necessary construction components in Lizares Village 2, Brgy. Bolanon, Sagay, Negros sector, are entitled to exemption from income tax on revenues directly derived therefrom. Considering that Opusland, Inc./R.U. Aquino Const. & Devt. Corp. - Joint Venture is a project contractor whose services have been engaged by NHA to undertake underprivileged and homeless citizens undertaken by the Government or the public only, including sites development for socialized housing projects, intended for the Based on the foregoing, housing projects covering houses and lots or homelots

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Const.& Devt. Corp.- Joint Venture shall be subject to VAT, even if the said the 379 Housing Units (House and Lot Packages with its necessary construction components. in Lizares Village 2, Brgy. Bolanon, Sagay, Negros Occidental by Opusland, Inc./R.U.Aquino Const.& Devt. Corp.- Joint Venture, shall be exempt from VAT. However, the purchases of goods/articles by Opusland, Inc./R.U. Aquino purchases are to be used for the socialized housing project, since VAT is an indirect tax which can be passed on by the seller of the goods/services. Moreover, pursuant to Section 20 (d)(3) of R.A. No. 7279, the construction of

However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented.

Very truly yours.

Commissioner of Internal Revenue KIM S.JACINTO-HENARES 042373 JUN 2 4 Z016

K-1-JHB