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[Mike S]

Real Estate Taxes / Income Tax / Homeowner’s association dues now subject to income tax and VAT (RMC No. 9-2013)



Homeowner’s association dues now subject to income tax and VAT (RMC No. 9-2013)

February 6, 2013 by Cherry Castillo Leave a Comment



Sorry to be the bearer of bad news, but we all saw this coming. Not long
after the imposition of income tax and value-added tax (VAT) on
condominium dues comes Revenue Memorandum Circular (RMC) No. 9-2013
dated January 30, 2013 which imposes income tax and VAT on homeowners’
association dues.





1. The homeowners’ association must be a duly constituted “Association” as defined under Section 3(b) of RA 9904;



“Section 3(b). ”Association” refers to the homeowners’ association
which is a nonstick, nonprofit corporation registered with the Housing
and Land Use Regulatory Board (HLURB), or one previously registered with
the Home Insurance Guarantee Corporation (now Home Guaranty
Corporation) or the Securities and Exchange Commission (SEC), organized
by owners or purchasers of a lot in a subdivision/village or other
residential real property located within the jurisdiction of the
association; or awardees, usufructuaries, legal occupants and/or lessees
of a housing unit and/or lot in a government socialized or economic
housing or relocation project and other urban estates; or
underprivileged and homeless citizens as defined under existing laws in
the process of being accredited as usufructuaries or awardees of
ownership rights under the Community Mortgage Program (CMP), Land Tenure
Assistance Program (LTAP) and other similar programs in relation to a
socialized housing project actually being Implemented by the national
government or the LGU.”



2. The local government unit having jurisdiction over the homeowners’
association must issue a certification identifying the basic services
being rendered by the homeowners’ association and therein stating its
lack of resources to render such services notwithstanding its clear
mandate under applicable laws, rules, and regulations. Provided further,
that such services must fall within the purview of the “basic community
services and facilities” which is defined under Section 3(d) of RA 9904
as those referring to services and facilities that redound to the
benefit of all homeowners and from which, by reason of practicality, no
homeowner may be excluded such as, but not limited to: security; street
and vicinity lights; maintenance, repairs, and cleaning of streets;
garbage collection and disposal; and other similar services and
facilities; and



“Section 3(d). “Basic community services and facilities” refer to
services and facilities that redound to the benefit of all homeowners
and from which, by reason of practicality, no homeowner may be excluded
such as, but not limited to: security; street and vicinity lights;
maintenance, repairs and cleaning of streets; garbage collection and
disposal; and other similar services and facilities.”



3. The homeowners’ association must present proof (i.e. financial
statements) that the income and dues are 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.



homeowners’ associations all over the Philippines will be reading RA
9904 and IRR in the next few days. Those who have questions may contact
the Housing and Land Use Regulatory Board (HLURB) and check their
website, http://hlurb.gov.ph/.



As a taxable entity, the homeowners’ associations will also need to file
Expanded Withholding Tax (EWT) returns and Value-Added Tax (VAT) or
Percentage Tax returns (whichever is applicable), plus the quarterly and
annual income tax returns. It is advisable for the officers of
homeowners’ associations to consult with the Revenue District Officer of
the BIR Revenue District Office where the subdivisions and villages are
located. It would be good for the homeowners’ associations to comply
with the requirements of RA 9904 and its IRR and avail of the income tax
exemption.


Source: homeowners-association-dues-subject-to-income-tax-and-vat-rmc-no-9-2013.html
        
        

        

        
        



        

        

        

        
            
            
            
            
                

[Jollygoodfellow]

Can everyone try this?

 

 

[i am bob]

Can't I just right-click and use "Paste as Plain Text" ?

 

I am sooooo lazy!

 

:mocking:

 

As for the info that Mike brought us, have many of us had problems where the associations were taking your money but providing very little in return?  I had heard that this was one of the reasons the government was getting more involved and that the taxes were to pay for this service from them.  How true this is I have no idea - just heard in a discussion one day.

[BooBoo]

Greetings! I have noticed that the stated price is the price for something here.

That is, rice is say P40 per kilo, and the VAT is 1%. The rice is therefore P39.99, +P 0.01 which comes to P40 sale price.

Will the fees also be calculated like this?

[Bruce]

You can be guran-teeeeeeed that if there is a way, the association will pass along any tax assessments to the home owners. Dues will be raised or a line item fee will be imposed.   

[earthdome]

Can't I just right-click and use "Paste as Plain Text" ?

 

I am sooooo lazy!

 

:mocking:

 

As for the info that Mike brought us, have many of us had problems where the associations were taking your money but providing very little in return?  I had heard that this was one of the reasons the government was getting more involved and that the taxes were to pay for this service from them.  How true this is I have no idea - just heard in a discussion one day.

 

My home in america which I call a condo is really a zero lot line home where I actually own the small lot my unit is on but share a wall with the neighbor on either side and has areas owned in common for all like the private drive. One of the things I researched very closely was the home owners association and their bylaws. I actually read the entire bylaws. In my case there are only 22 units and the home owners association is actually run by people who own units and reside there. In the three years I have been there I haven't noticed any real problems and major spending decisions are voted on by the owners. I think this may be the exception.

[Jollygoodfellow]

Can't I just right-click and use "Paste as Plain Text" ?   I am sooooo lazy!

 

So is most others and this way it is permanent for every post until the setting is ever changed by the member.  So one would not have to remember to right click and paste as plain text.

 

:cheersty:

[i am bob]

Can't I just right-click and use "Paste as Plain Text" ?   I am sooooo lazy!

 

So is most others and this way it is permanent for every post until the setting is ever changed by the member.  So one would not have to remember to right click and paste as plain text.

 

:cheersty:

I didn't realize it was a semi-permanent change!  

 

Thanks BossMan!

 

:tiphat:

[Jollygoodfellow]

 

Can't I just right-click and use "Paste as Plain Text" ?   I am sooooo lazy!

 

So is most others and this way it is permanent for every post until the setting is ever changed by the member.  So one would not have to remember to right click and paste as plain text.

 

:cheersty:

I didn't realize it was a semi-permanent change!  

 

Thanks BossMan!

 

:tiphat:

 

Yes and I think from memory once you set it you need to log in again to make the setting work. This is why I wish all will do so as I spend a lot of time fixing pasted posts and this will solve most of the problems. 

[Mike S]

OK Sir Tomas .... I’ll give it a try and see what happens ..... do I have to do this each time I paste or does it remember my selection ...... like Bob ... I’m lazy .....  (...... did it work OK .... huh ... huh) ..... :tiphat: :cheersty: