BIR Ruling No. 284-2016

REPUBLICOF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Section 20 of RA 7279

BIR Ruling No. 063-14

284-2016

6m272016

Suites 21 & 24 3J Heights Bldg. No.35 Visayas Avenue,Diliman Quezon City PHINTECSTAR CONSTRUCTION,INCORPORATED

Attention: Mr. Zoilo Joaquin C. Amador President

Gentlemen:

Housing Act of 1992" Certificate of Tax Exemption for the socialized housing project, Magalona Heights 1. located at Brgy. Sto. Nino, E.B. Magalona, Negros Occidental (Site 1, pursuant to Republic Act (R.A.) No. 7279, otherwise known as the "Urban Development and under the National Housing Authority (NHA)'s Yolanda Permanent Housing Project. This refers to your letter dated Februaryl8. 2015 requesting issuance of

under the said project includes "Survey Works, Earthworks, Road Works, Drainage has committed to deliver Six Hundred Sixty Eight (668) units (House and Lot Package) Works, Water System, Electrical Power Lines, Miscellaneous Works and Housing Construction. that on February 17, 2015, a Contract for the Procurement of House and Lot Packages Magalona Heights 1, Brgy. Sto. Nino, E.B. Magalona, Negros Occidental (Site 1), was executed between NHA and Phintecstar Construction, Incorporated, whereby the latter for a price of Exchange Commission (SEC) with Company Registration No. Documents submitted show that Phintecstar Construction. Incorporated (TIN: is a domestic corporation duly registered with the Securities and and that according to the contract, the scope of works : and

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provides: In reply, please be informed that Section 20 of Republic Act (RA) No. 7279

'Sec. 20. Incentives for Private Sector Participating in

and homeless, the following incentives shall be extended to cost of housing units for the benefit of the underprivileged Socialized Housing.To encourage greater private sector participation in socialized housing and further reduce the the private sector:

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(d) Exemption from the payment of the following:

(2 Project-related income taxes; Capital Gains Tax on raw lands used for the

3 Value-added tax for the project contractor project;

concerned."

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

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

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underprivileged and homeless citizens undertaken by the Government or the public only, including sites development for socialized housing projects, intended for the sector, are entitled to exemption from income tax on revenues directly derived Based on the foregoing, housing projects covering houses and lots or homelots

contractor whose services have been engaged by the NHA to undertake the construction program of the NHA pursuant to R.A. 7279 in connection with its Yolanda Permanent I Brgy. Sto.Nino, E.B.Magalona, Negros Occidental Site 1), a socialized housing of 668 Housing Units with its necessary construction components in Magalona Heights therefrom. Considering that Phintecstar Construction, Incorporated is a project

Housing Project, the income directly realized by Phintecstar Construction. Incorporated from the construction of the 668 Housing Units (House and Lot Packages) with its necessary construction components in Magalona Heights 1. Brgy. Sto. Ninio

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E.B. Magalona.Negros Occidental Site 1. shall be exempt from project-related income taxes.(BIR Ruling No.063-14 dated February 19,2014)

Moreover, pursuant to Section 20 d3 of R.A.No.7279,the construction of the 668 Housing Units (House and Lot Packages) with its necessary construction

VAT. However, the purchases of goods/articles by Phintecstar Construction. Occidental (Site 1) by Phintecstar Construction. Incorporated shall be exempt from socialized housing project, since VAT is an indirect tax which can be passed on by the seller of the goods/services. components in Magalona Heights 1, Brgy. Sto. Nino, E.B. Magalona, Negros Incorporated shall be subject to VAT, even if the said purchases are to be used for the

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,

KIM S.JACINTO-HENARES Commissioner of Internal Revenue 042363

K-1-VDPM JUN 2 4 2016