Assessing the validity of imposition of VAT on association dues, membership fees, and other assessments/charges collected by condominium corporations

• Main Author: Aquino, Johanna M.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Value-added tax—Philippines; Condominium fees—Taxation—Law and legislation—Philippines; Taxation-State and Local; Tax Law
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6812
• Institution: De La Salle University

The Commissioner of Bureau of Internal Revenue (―BIR‖), who is given the power to interpret the provisions of the National Internal Revenue Code, as amended (―NIRC‖), and other tax laws, regularly issues revenue memorandum circular to clarify or amplify certain or pertinent portions of the NIRC and other tax laws. The study focused on the issuance of BIR Revenue Memorandum Circular 65-2012 (―BIR RMC 65-2012‖) in 2012, when the BIR Commissioner clarified that association dues, membership fees and other fees/charges collected by the condominium corporations (referred hereafter as ―condominium association dues and assessments‖) are subject to value-added tax (VAT). The study assessed the validity of the imposition of VAT based on BIR RMC 65-2012 through the application of requisites of a valid administrative circular provided by law and jurisprudence. The study through review of literature, jurisprudence and analyses of condominium owners‘ position, as well as that of condominium corporations‘, concludes that the imposition of VAT is unreasonable and BIR RMC 65-2012 was issued beyond the delegated rule-making power of the BIR Commissioner. However, the researcher recommends that further research study is needed since there is no Supreme Court decision yet that will support the researcher‘s conclusion.