Update (03.11.15): I was told last night at an informal meeting here of the Residential Areas Committee of the Board with Unit Owners that VAT may be imposed upon Unit Owners being billed by the Soho Central Condominium Corporation (SCCC) for their share of the Real Estate Tax (RET) but that VAT is not imposed upon the SCCC by the City of Mandaluyong for the RET. The reason given was that the SCCC was doing a service for the Unit Owners so VAT would be imposed.
There is no gain for the non-profit condominium corporation since it cannot profit. The condominium corporation simply acts as a hand to give the RET to the city. That hand is an entity all Unit Owners are members of under law. What if a Unit Owner were to go and pay their share of the common RET directly? Would there be VAT?
I encourage everyone to write to the BIR with questions and find out about this practice and what is charged VAT in the condo bills. You may think of various scenarios as I have proposed to avoid the VAT.
Update (03.11.15): A statement was made on another list that there should be a service that is imposed a VAT. The RET is not a service fee for the condominium corporation.
Update (03.12.15) : Real Estate Tax (RET) is not a service charge on the condominium bills but an allotted portion of the common RET of the common property determined by square meters of each unit. I had thought that DUES we all pay covers all services provided for the Unit Owners. Seems that there is a problem with logic.
Is Condominium Real Estate Tax exempt from VAT?
This was sent to me from another condominium owner in Makati from that city within a city still being built. I looked at our condominium corporation billing and VAT was charged on real estate tax. This is being sent to others and I was already sent the quote below as a reply from one person. Are there any comments to this information supposedly told to the person from someone at BIR? Please ask questions and also contact BIR to find out what is going on."...Upon purchase of any property under contract to sell with price...it is FIX...therefore VAT is not suppose to be included. VAT only applies to business entities...not to fix price purchases. Commercial items are vatable, but our water under SOHO should not have VAT since we are 3rd party, developer is under contract with MWSS. Aside, our receipts are computer print outs, not BIR receipts with BIR registered # printed on the receipts. Therefore, accounting should not charge VAT even on INTEREST per day of delay in payment."
