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BIR Ruling No

ABC Homeowners’ Association requested a tax exemption certificate as a homeowners association under Republic Act No. 9904. The municipal mayor of Nasugbu, Batangas certified that ABC Homeowners’ Association funds basic services for homeowners that the local government cannot provide due to lack of resources. The ruling found that ABC Homeowners’ Association is entitled to tax exemption. As a registered homeowners association, it provides basic community services defined by law and the local government has certified it lacks resources to provide these services, so the association's income from dues and rentals is exempt from income and VAT taxes if used for members' basic services and facility maintenance.

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177 views

BIR Ruling No

ABC Homeowners’ Association requested a tax exemption certificate as a homeowners association under Republic Act No. 9904. The municipal mayor of Nasugbu, Batangas certified that ABC Homeowners’ Association funds basic services for homeowners that the local government cannot provide due to lack of resources. The ruling found that ABC Homeowners’ Association is entitled to tax exemption. As a registered homeowners association, it provides basic community services defined by law and the local government has certified it lacks resources to provide these services, so the association's income from dues and rentals is exempt from income and VAT taxes if used for members' basic services and facility maintenance.

Uploaded by

Pau Line Escosio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BIR Ruling No.

063-2018 dated 24 January 2018

Facts:

ABC Homeowners’ Association requested for a Certificate of Tax Exemption enjoyed by Homeowners’
Associations under RA No. 9904, as enunciated in RMC No. 9-2013. The Office of the Municipal Mayor of
Nasugbu, Batangas certified that ABCHomeowners’ Association funds the basic services for its
homeowners or members and that the local government cannot cater to such services for lack of
resources.

Issue:

Is ABC Homeowners Association entitled to tax exemption?

Ruling:

Yes. Considering that ABC Homeowners’ Association is a duly registered Homeowners Association with
the Housing and Land Use Regulatory Board (HLURB); that its financial statements show the delivery of
basic community services defined under Section 3 (d) of RA No. 9904; and that the local government
unit covering the jurisdiction of the Homeowners Association has issued a Certificate that it lacks the
resources to provide these services to the Association, the income of ABC Homeowners’ Association
derived from association dues and rental facilities is exempt from income tax and VAT or percentage tax,
whichever is applicable, provided that such income and dues shall be used for the cleanliness, safety,
security and other basic services needed by the members, including the maintenance of the facilities of
their respective subdivisions or villages.

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