BIR Ruling No. 7-2018

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

RMC No. 65-2012: RMC No. 9-2013. January 10, 2018 Date Bureau of Internal Revenue Ruling R.A. No. 9904: #007-2018 Person to Contact:Chief, Law Division Tel Nos. 926-55-36 / 927-09-63

Brgy. Commonwealth, Quezon City FLORA VISTA CONDOMINIUM CORPORATION 345 Peacock St. East Fairview,

Gentlemen: Attention: ATTY. MIGUEL ROMUALDO T. SANIDAD President

enunciated in Revenue Memorandum Circular No. 9-2013 which clarifies the taxability of association dues, membership fees, and other assessments/charges collected by Homeownersj 9904 otherwise known as the "Magna Carta for Homeowners and Homeowners' Associations", as Associations. Flora Vista Condominium Corporation is entitled to the exemption under Republic Act No. This refers to your letter dated February 20, 2013 requesting for a confirmatory ruling that

to Homeowners' Associations as technically defined in Section 3 of Republic Act No. 9904. to Wit: (SEC) under SEC Registration No. domestic condominium corporation registered with the Securities and Exchange Commission In reply, please be informed that Revenue Memorandum Circular No. 9-2013 applies only welfare, heaith and happiness of all the residents in the Project." and operate the Project pursuant to and in accordance with the provisions of the republic H; Page No. 36; Book No. 06; Series of 2010 of Notary Public Atty. H. Fabre Luna, and such other further amendments as may be validly executed and duly files with the Housing Act No. 4726 and the Master Deed, with the end view of promoting the safety, interest and Regulatory Board (The "Master Deed"), as well as to manage, administer, maintain. with Declaration of restrictions executed by Willie J. Uy (the "Developer), Doc. No. 178- areas in the condominium project known and identified as FLORA VISTA (the "Project") which has been constituted, pursuant to the provisions of republic Act No. 4726. on the properties described in and brought under the operations of said Act by the Master Deed Documents submitted disclosed that Flora Vista Condominium Corporation. is a -"The Corporation is hereby formed to own or hold title to the land and the common and that its primary purpose is:

nonprofit corporation registered with the Housing and Land Use Regulatory P "" Association' refers to the homeowners' association which is a nonstock

ora Yista condonna corporauon Page 2 of2

ncw Home Guarany Corporation or the Securities and Exohauge Commission (SEC) organized by owners cpurenasers of a iot in a subdivision/villame o other resttiential real properry iosaced within the jurisdietion or the aasociation: or ewardees. ucutruetuaries. HURBy.or one nreviousiy registered with the Home isuranec Ouarantee Corsoration legai occupants and/or lossees of a housing unit andor lot in a goverrnnsm sosiatizec or sconomic housing or reiocation project and cther urban eotates: or underpriviieged and honeless citizers as defined under existing laws in the proceas of teing aoeredited as CMP)Land Ternre Assistanee Program(LTAP and cther sinilar prorams in reiation Usnfructuaries or awardees of ownership right undar the Comaunity Morgage Frogran toa socialized housingprojeet acualiy being impiementes bythe nationai governnent or the LgU(Emphasis ous.

The terrn "suodiisioriliape". also defined in Secnon 3 of tha some law. exciudes

with or without improvements therson. primarily for residential purposes". condominium prcjecis as it contemplates a -trast or parcel of land partitioned inc inaivicual ioes.

Rspuohc Act No. 4725 ctherwise known as Ths Condominian Aot". the controiling law on condominium projects. aefines "condominiums" and "condominiun cornorarions as foliows:

"Sec.2.A condominium is an interest in roal properry consisting of separate interest in a unic.in arssidential.industriaiorcommercial nuilding nndanundivided interest in commom. direetiv-or indiroctiy,in the jand on which it is located and in oiner ommon areas of the buiding.A condomintum mey inciude.in addition.a separae interest in other nortions ot

such reanronerty.Titie to thocomnon areas.inciuding theland.ortaeappurenatereats

in such areas. may be heid by a corporation spoeially formed for the purpose (hercinarter known as the "condominium corporation") in which the holders of ssrarere interest shall

automatically be members or sharenoiders. to the exclusion of others. in proportior: to the appurtenam interest of their respective units in the common areas.

The roai right in condominium may be owiership or any other interost in renl property

recognized by law, on propesty in inc Civil Code and other pertinent iaws."

From the foregoing it is ciear that the conditional exempuion provided for in Republic Act

No. 9904 and reiterated in Reverue Memorandum Cireuiar No. 9-2013 only appiies to

Homeowners' Associations of subdivisions and vilages and not to condommiurm corporaions

covered by Republie Act No. 4726. The taxation of condominium corporations is covered by

Revenue Memorandum Circular 65-2012. Thus. this requesi for exemption from Insome Tax and

Valus-Added Tax (VAT) or Percentage Tax, whichever is applioable, is aenied for lack of iegal

basis.

Very truly yours.

a

CAESAR RDULA

Commissioner of nternal Revenue

FI-NA 012507