THE CITY TREASURER and THE CITY GOVERNMENT OF TAGUIG CITY v. UPTOWN RITZ RESIDENCES CONDOMINIUM ASSOCIATION, INC.

REPUBLJC OF THE PHILIPPINES COURT OF TAX AI>I>EALS QUEZON CITY En Bane THE CITY TREASURER and CTA EB NO. 2977 THE CITY GOVERNMENT OF (i' ormerly SCJI No. 315 and TAGUIG CITY, Civil Case No. 22-4583) Petitioners, Members: -versus - RINGPIS-LJBAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID , FERRER-FLORES, and ANGELES,JJ UPTOWN RITZ RESIDENCES Promu Igated: CONDOMINIUM ASSOCIATION, INC., _JAN 0 8 2 R espondent. X --- --------------------------- -------- ------ - ----- X DECISION MODESTO-SAN PEDRO, J.: B efore the Court En Bane is a Petition for Review docketed as CTA EB No. 2977 filed on September 9, 2024, assailing the Deci sion dated June 6, 2024 ("Assailed Decision"), 1 and Order dated Ju ly 23, 2024 ("Assailed Ordcr"),2 both rendered by the Regio nal Trial Court of Taguig City - Branch 153 ("RTC").y. 1 Rollo, pp. 38 to 44. !d. at 45 to 46.

DECISIO' CTA EB No. 2977 ( Formcrl~ SCA No. 315 and Ci\ il Case :..Jo 22--1:'83} Page 2 of II The Parties Petitioner City Government of Taguig ("petitioner Taguig") is a political subdivision of the government, existing under and by vi1iue of Republic Act ("RA ") No. 7160, also known as the Local Government Code ("LGC'), RA No. 8487, also known as the Charter ofthe City ofTaguig, and other laws of the Philippines.3 Petitioner City Treasurer ("petitioner Treasurer"), represented by Mr. Voltaire L. Enriquez, is a government instrumentality authorized, among others, to act upon and decide protest and claims for refunds and/or tax credits of illegally and erroneously collected local business taxes.4 Respondent Uptown Ritz Residence Condominium Association, Inc. is a duly organized condominium corporation existing under Philippine laws, particularly pursuant to RA No. 4726, or otherwise known as the "Condominium Act", with principal office located in Taguig City. 5 The Facts When respondent sought to renew its business pennit with petitioner Taguig for the year 2022, petitioner Treasurer issued a Billing Statement imposing fees which include local business tax ("LBT"), environmental impact fee ("ElF"), deficiency tax, and business plate/sticker ("BPS") fee. Respondent paid these.6 Respondent later filed a f01mal written complaint for refund for 2022 LBT and BPS fee before petitioner on March 10, 2022, praying for the cancellation ofLBT imposed on year 2022 business permit renewal fee, EIF, and the grant of its claim for refund for LBT, deficiency tax and BPS fees for the year 2022 amounting to P244,782.87_7 Petitioner Treasurer responded through a letter denying respondent's claim. Thus, respondent filed before the Metropolitan Trial Court ("MeTC") ofTaguig City, Branch 74 its Complaint, praying for the cancellation ofLBT imposed on year 2022 business permit renewal, and for refund of LBT, ElF, deficiency tax and BPS fees for the year 2022 amounting to !"244,782.87 plus !"200,000.00 Attorney's feesL----- Par. 9. Petition for Review. id. at 19. -.~ Assailed Decision. id at p. 38. 5 !d. 6 Par. 12. Petition for Revie\V, id at 20. 7 Par. 13. id. 8 Par. 14. id.

DECISIO\ On January 3, 2023, the MeTC partially granted the reliels prayed lor by respondent. The lower court ordered petitioners to refund or issue tax credit in favor of respondent the total amount of P237,632.87 representing alleged erroneously paid l.IH, ccdula corporation and deficiency tax l(Jr year 2022. It denied the claim for refund of I:11: by respondent and held that condominium corporations arc generally liable to pay for UF and other fees imposed by the City Government ofTaguig per Ordinance No. l 16, series of2008.~ On May 22, 2023, petitioners liled a timely Notice of Partial Appeal of the aforementioned Decision, dated January 3, 2023. 10 On June 13, 2024, respondents received a copy of the RTC Decision, dated June 6, 2024, amnning in toto the Decision of the lower court. 11 Petitioners liled a Motion for Reconsideration of the Assailed Decision, dated June 6, 2024, which the RTC denied in an Order, dated July 23, 2024, a copy of which was received by petitioners on July 26, 2024, denying petitioners' Motion. 1" Petitioners liled its Motion for l�:xtension of Time to File Petition for Review on August 22. 2024. 13 In a Minute Resolution, dated August 30, 2024, the Court, subject to the condition that the motion for extension was liled on time, granted petitioner a final and non-extendible period of 15 days ll�01n August 25, 2024, or until September 9, 2024, within which to file its Petition for Review. 11 Petitioners then liled their Petition for Review on September 9, 2024. 1' On November 7, 2024, respondent lilcd its Comment/Opposition (To the Petition for Review dated 06 September 2024 ). 1 (' In a Resolution dated December 5, 2025, this Court l:�n Bane submitted the case for decision. llcnce, this Decision.,. ') Par. 17. id. at .:?:1. 111 Par. I8. id 11 Par. 19. id. 1�' Par. ~0. id 1�' !d. at 1 to (,. 1"1 !d. at 16. 1 ~ /d. at 17 to J5. 111 /d. at 51 to 69.

DHISIO'i CTA EB No. 2977 (Formerly SCA 1\o. 315 and Ci\�il Case :--Jo. 22--1-583) Pagc-1-ofll The Assigned Error Petitioners raise the following issue before this Court: THE HONORABLE REGIONAL TRIAL COURT BRANCH 153 OF TAGUIG CITY COMMITTED REVERSIBLE ERROR IN AFFIRMING THE DECISION OF THE MTC WITH REGARD TO THE GRANT OF REFUND OF LOCAL BUSINESS TAX TO RESPONDENT." Arguments of the Parties Petitioners' arguments Petitioners argue that there is no law that exempts from taxation the association dues and income collected by condominium corporations from members; that condominium corporations are specifically held liable for LBT under Section 75 of the Taguig Revenue Code, as amended by Taguig Ordinance No. 34-17, where the LBT imposed is computed based on declared gross sales or gross receipts; and that respondent was assessed as a contractor pursuant to Section 7(d) of Ordinance 34, Series of2017. Respondent's arguments Respondent counters that petitioners misunderstood the nature of its claim for refund as it does not claim an exemption but claims at the outset that it is not one of the entities that can be taxed with LBT as it is not engaged in the sale of services, and the money and assets collected from its members are not income eamed from any profit-making activities. As such, it also cannot be considered as a contractor since its activity does not consist of sale of service for a fee. Our Ruling The Petition for Review must be denied. The Court En Bane has jurisdiction over the Petition Under Section 7(a)(3) ofRepublic Act ("RA ") No. 1125, as amended by RA No. 9828, ("the CTA Law"), the Court of Tax Appeals ("CTA") shall exercise exclusive appellate jurisdiction to review by appeal the decisions, orders or resolutions of the Regional Trial Cow1s in local tax cases originally........---� 17 Statement of the Issue, Petition for Review. id. at 22.

DECISIO:'\. CT A EB 1\o. 2977 (Formerly SCA \lo_ 315 and CiYil Cas.: 1\o_ 22--1.583) Page 5 or 11 decided or resolved by them m the exerctse of their original or appellate jurisdiction. In particular, Rule 4, Section 2(b) of the Revised Rules of the Court of Tax Appeals 18 ("RRCTA") provides that the Cout1 en bane shall exercise exclusive appellate jurisdiction to review by appeal the decisions, resolutions or orders of the Regional Trial Courts in local tax cases decided or resolved by them in the exercise of their appellate jurisdiction. Meanwhile, Section 11 ofthe CTA Law prescribes: SEC. II. Who May Appeal: Mode of Appeal: E�Tect of Appeal. - Any party adversely a�Tected by a decision. ruling or inaction of the Commissioner of Internal Revenue. the Commissioner of Customs, the Secretary of Finance. the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or rhe Regional Trial Courrs may file an appeal1rirh rhe CTA wirhinrhirry (30) days a(ier rhe receipl of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Secrion 7(a}(2) herein. (Italics supplied.) This is echoed in Rule 8. Section 3(c) ofRRCTA: (c) A party adversely a�Tected by a decision or ruling of'the Central Board of Assessment Appeals and rhe Regional Trial Courr inrhe exercise o(lheir appellare jurisdicrion may appeal to the Court by tiling before it a petition for review Jl'ilhin rhirly days fi'om receipl of a copy of/he quesrioned decision or ruling. (Italics supplied.) As such, in order for this Court to acquire jurisdiction in the instant case, the petition for review by the aggrieved party must be filed before the Court en bane within 30 days from the date of receipt of the order of the RTC in local tax cases resolved by them in the exercise of their appellate jurisdiction. In this case, petitioners received the Assailed Order on their timely filed Motion for Reconsideration on July 26, 2024, 19 giving them until August 25, 2024 to file a petition for review before this Court. However, petitioners instead filed a Motion for Extension of Time to File Petition for Review on August 22, 2024,211 requesting for additional 15 days from the expiration of the original 30-day period to file the petition for.....--- 18 A.M. No. 05-11-07-CTA. November 22.2005. 19 Annex B to the Motion for Extension of Time to File Petition for Review. id. at 14. 20 !d. at I to 4.

I>ECISIO:'\ (_ T:\ Ui \;u 2'!77 il� \Hino.:r[\ S(. :\ \(l :; I_-., 'dlld ( I\ il l �:hL' i\,l_ ?~.l- I~X_\) review. This was granted by this Court on August 30, 2024, giving petitioners until September 9, 2024 to file their Petition for Revicw." 1 It is notable, however, that the RRCTzl docs not authorize the grant or additional 15 days in filing the Petition for Review before the Court en bane on cases involving, the decisions, resolutions, or orders of the RTC in the exercise of its appellatejurisdiction. Said permissible period of extension of 15 days to file Petition t(Jr Review is available only on the decision or resolution of a Division of the Court on a motion t(Jr reconsideration or new trial under Rule 8. Section 3(b} J(Jr civil cases and Rule 9. Section 9(h) for criminal cases o(the RRCD1.. llowevcr, Rule 8. Section 4(c! o/RRCTA states that the mode of appeal from a decision or ruling of the RTC in the exercise of their appellate jurisdiction bet(Jrc the Coun en bane is by tiling a Petition t(Jr Review as provided in Rule 43 o/the 1997 Rules ofCivil Pmcedure. Thus, in suppletory relcrence on the provisions of Rule 43, Section 4 thereof provides that the Court of Appeals may grant an additional period of 15 days within which to file the petition f(Jr review upon proper motion and the payment of the full amount of the docket Ice bet(JI'C the expiration of the reglcmenlary period. Verily, an extension of time to tile of a petition J(Jr review before this Court/~�n Bane on cases involving the decisions, resolutions, or orders of the RTC in the exercise of its appellatejurisdietion may be authorized pursuant to Rule 43. Section 4 o/the /997 Rules o/Civi/ Procedure. Accordingly, the !\!lotion J(Jr Lxtension or Time to File Petition for Review on August 22, 2024 was timely filed. Petitioners indeed Jilcd their Petition J(Jr Review on September 9, 2024, well-within the 15-day extension granted by the Court. Thus, this Court acquired jurisdiction over the same. Condominium corporalions are no! subject to JJJT. A taxpayer ccllmol be exempt(i�om something it is not liable for in the(irsl ploce. Petitioners insist that respondent is not exempt Ji�om the imposition of LBT and that the latter failed to prove that it is entitled to an exemption. - llowevcr, J1Ctlltoners gravelv misunderstood the 1\!leTC ruling, as ~ upheld by the RTC, and the cited jurisprudence on the matter.! 1 Minute Resolution dnkd August30. 202'--l_ Jd at I(J. -"

DECISIO:\ CTA EIJ Nn. 2977 (Formerly SCA '\Jo. 315 and Ci\ il Ca::.c 1\o_ 22--1.:183) Page 7 or 11 There lies a difference between tax exemption and not being subject to tax. A tax exemption entails that a particular transaction or property is subject to a particular tax, but by vitiue of a legislative grant, it becomes exempted from its payment. A tax exemption may be lifted by a succeeding legislation and, thereafter, the person, transaction or property shall already be liable for the tax. On the other hand, when a particular person, transaction, or property is not subject to tax, there is no legislation subjecting it to tax in the first place. Since it is not imposed with a tax, it logically follows that it does not need any exemption. As such, the issue of exemption is rendered irrelevant. Section 143 ofthe LGC and Section 75 ofthe Taguig Revenue Code, as amended, imposes tax on businesses at various rates depending on the nature of the business activity. Based on this, local tax is imposed only on businesses. Thus, it is essential to determine whether a person, transaction, activity, or property is in pursuit of or engaged in trade or business for it to be imposed with LBT. In this case, respondent, as the subject person, is undisputably a condominium corporation existing under Philippine laws, particularly pursuant to RA No. 4726, or otherwise known as the "Condominium Act". As already settled in Yamane vs. BA Lepanto Condominium Corporation,"" ("Yamane") and reiterated in Delos Santos vs. Commissioner ofInternal Revenue,23 a condominium corporation is not engaged in trade or business. Association dues are not intended for profit, but for the maintenance of the condominium project. The collection of association dues, membership fees, and other charges is purely for the benefit of the condominium owners: For when a condominium corporation manages. maintains. and preserves the common areas in the building. it does so only for the benefit of the condominium owners. It cannot be said to be engaged in trade or business. thus. the collection of association dues. membership fees. and other assessments/charges is not a result of the regular conduct or pursuit of a commercial or an economic activity. or any transactions incidental thereto. Neither can it be said that a condominium corporation is rendering services to the unit owners for a fee. remuneration of consideration. Association dues, membership fees. and other assessments/charges form part of a pool ti�om which a condominium corporation must draw funds i~ 22 G.R. No. 154993, October 25. 2005. ~-' G.R. No. 222548. June 22. 2022.

l'agl' ~or I I order to bear the costs tlJt� maintenance. repair. improvement. reconstruction expenses and other administratiYe expenses. i\ccordingly, respondent !'unctions as an entity merely to promote the maintenance and upkeep ol'thc condominium property for the mutual benefit of the owners. Its receipts arc not remunerations or fees Cor services rendered but arc mere reimbursements fi�om the condominium unit owners for the costs incurred by the corporation in maintaining the condominium building. It docs not advertise its services for the public to avail. Its activities arc lor the mutual benefit or the owners, who arc also the shareholders or the condominium corporation. Clearly, it is not engaged in trade or business. Based on the foregoing, this Court can already sunlciently conclude that the McTC and RTC were correct in granting the LBT refund in favor or respondent as it is not engaged in business, hence, not liable Cor 1.13'1. Therefore, the denial or petitioners' appeal herein is justiJlcd. I lowcver, We deem it necessary to address petitioners' other arguments and thereby put them to rest. Petitioners allege that condominium corporations arc being taxed for their receipts from the condominium owners and that income and profit arc deemed irrelevant with respect to gross sales or receipts which arc taxable under the rc;c This argument is again misplaced. Section 131 (n) o(the l,GC dcJ!ncs gross sales and receipts as follows: (n) "(!ross Sales or Receipts" include the total amount of money or its ~quintlent representing the contract price. compensation. or sen ice ke. including the amount charged or materials supplied with the services and deposits or advance payments actually or constructively received during the taxable quarter lor the sen ices performed or to be perlormed for another person excluding discounts ifdeterminahle at the time of sales. sales return. e~cise ta~. and valuc-adclecl ta~. The above definition of gross sales and receipts docs not factor any deductible costs and expenses. i\s such, income and profit arc indeed irrelevant. I Iowcvcr, mere receipt or money or its equivalent does not automatically subject the same to LBT. The receipt thereof must represent the contract price, compensation or service Icc. But then, as already explained in Yamane, a condominium corporation docs not render services to the unit owners for a fcc, remuneration of consideration. i\s such, respondent's receipts do not qualify as gross sales or receipts subject to LBT as it docs not y represent a service lee.

DECISIO~ CTA E!J No. 2977 (Form~.:rly SCA 1\o. 315 and Ci' il Case No. ~~--L'~IBJ Page 9 of II Neither do condominium corporations fall within the category of a contractor under Section 131(h) of the LGC and Section 75(d) of the Taguig Revenue Code, as amended, whose activity consists essentially in the sale of all kinds of service for a fee. The term "service for a fee" qualifies a contractor for purposes of imposition of LBT. Thus, again, we go back to the pronouncement in Yamane that condominium corporations do not render services for a fee and, hence, negates the definition of a contractor in LGC and the Taguig Revenue Code, as amended, Further, the term contractor as used under Section 131 (h) ofthe LGC in a definition echoed in Section 74 ofthe Taguig Revenue Code, as amended, is given the following inclusions: As used in this Section. the term "contractor" shall include general engineering. general building and specialty contractors as defined under applicable laws: tilling. demolition and salvage works contractors; proprietors or operators of mine drilling apparatus; proprietors or operators of dockyards; persons engaged in the installation of water system. and gas or electric light. heat. or power; proprietors or operators of smelting plants. engraving. plating. and plastic lamination establishments: proprietors or operators of establishments for repairing. repainting. upholstering, washing or greasing of vehicles. heavy equipment. vulcanizing. recapping and battery charging; proprietors or operators of furniture shops and establishments for planning or surfacing and recutting of lumber, and sawmills under contract to saw or cut logs belonging to others: proprietors or operators of dry cleaning or dyeing establishments. steam laundries. and laundries using washing machines: proprietors or owners of shops for the repair of any kind of mechanical and electrical devices. instruments. apparatus, or furniture and shoe repairing by machine or any mechanical contrivance; proprietors or operators of establishments or lots for parking purposes: proprietors or operators oftailor shops. dress shops, milliners and hatters. beauty parlors. barbershops. massage clinics. sauna, Turkish and Swedish baths. slenderizing and building salons and similar establishments; photographic studios; funeral parlors: proprietors or operators of hotels. motels, and lodging houses: proprietors or operators of arrastre and stevedoring. warehousing. or forwarding establishments; master plumbers. smiths. and house or sign painters: printers. bookbinders. lithographers; publishers except those engaged in the publication or printing of any newspaper. magazine. review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication and advertisements: business agents, private detective or watchman agencies. commercial and immigration brokers, and cinematographic film owners, lessors and distributors. A condominium corporation is not included in the foregoing definition. Even its nature of operations or activities is not closely similar to those included in the list Conclusively then, a condominium corporation is not intended to be classifi� as a contractor and no LBT on contractors can be imposed upon it_...........--

llECISIO:\ CTi\ U3 No. 2977 (Fonner!~ SCI\ :"Jo. 315 and Ci,�il Case 1\o. 22--1-583) Page IOofll Given that respondent, as a condominium corporation, is not subject to local tax on gross receipts as a contractor and is not engaged in trade or business in the first place, it does not need to claim any exemption therefrom. Thus, petitioners' insistence that respondent is not entitled to LBT exemption is gravely misplaced. Respondent is not subject to LBT at all. As such, any LBT payment made by respondent was erroneous, illegal, and warrants a refund. Verily, the RTC was correct in upholding the grant of refund in favor of respondent. Absent any substantial error committed by the lower courts, this Court shall not disturb the same. ACCORDINGLY, the instant Petition for Review is hereby DENIED for lack of merit. Accordingly, the Assailed Decision dated June 6, 2024 and Assailed Order dated July 23, 2024 are hereby AFFIRMED. SO ORDERED. WE CONCUR: f))..,. -i..t.- 7 - MA. BELEN M. RINGPIS-LIBAN Presiding Justice ciate Justice ~~ t ~ ~Fa;~dD MARIAN IV..fJF. REY~S--FAJ'iRDO Associate Justice LANE~~D Associate Justice

DECISIO'\ CTA EB :.Jo_ 2977 (Fonnerl~ SC\ :.Jo. 31.5 and Ci\�il Case i\o_ 22-.f.583) Page II of II HENRY $NGELES Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. llv. -41.-. .., .__ MA. BELEN M. RINGPIS-LIBAN Presiding Justice