Condo association dues subject to VAT—BIR

Bureau of Internal Revenue building. INQUIRER FILE PHOTO

MANILA, Philippines — Association dues paid by residents of condominiums are still subject to value added tax (VAT), noting that recent rules on the issue remain valid, according to the Bureau of Internal Revenue (BIR).

In a statement this week, the BIR described as “misinformation” reports saying that a recent Court of Tax Appeals (CTA) decision resulted in the exemption of condominium dues from VAT.

“It has come to the attention of the BIR that there is ongoing misinformation as with regard to the effect of the decision of Officemetro Philippines, Inc. with regard to condominiums,” the BIR said.

This refers to a decision by the CTA involving Officemetro (formerly Regus Centres Inc.).  The CTA ruled that condominium dues billed to Officemetro in 2005 were not subject to expanded withholding tax (EWT).

“The case does not in any way involved the issue of value added tax,” the BIR said. The BIR said it would appeal the decision before the CTA en banc.

“It is not a decision of the Supreme Court as some quarters would like people to believe,” it said.

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