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Tuesday, January 10, 2006
Tax notes: Tax on condominium corporations
Condominium corporations are organized as non-stock, non-profit entities for a limited purpose under the Condominium Act.
Condominium dues, fees and assessments collected from unit owners are not taxable income of a condominium corporation pursuant to Bureau of Internal Revenue Ruling 18-2005 dated Sept. 16, 2005.
Such amounts are funds held in trust for the unit owners or members in order to sustain the expenses attributable to the functions of a condominium corporation.
Likewise, such fees are not subject to value-added tax (VAT) because they do not constitute payments for services rendered.
Unless a condominium corporation engages in activities for profit, it shall not be subject to VAT. (Source: Punongbayan & Araullo)
For Bisaya stories from Cebu. Click here. (January 10, 2006 issue)
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