BIR RULINGS
- Sale, importation, printing or publication of books and any newspaper, magazine, review, or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements shall be exempt from value-added tax.
- Furthermore, other than non-exempt activities such as the printing of brochures, bookbinding, engraving, stereotyping, electrotyping, lithographing of various reference books, trade books, journals and other literary works, said transactions are subject to VAT; further, sale of books, newspapers, magazines, reviews and bulletin in digital or electronic format or computerized versions, e-books, e-journals, electronic copies, online library services, CDs and software shall be subject to VAT. (BIR Ruling No. VAT-200-21, June 08, 2021).
- Basis in computing capital gains tax in the subsequent sale of shares is the net capital gains or loss realized on the sale, barter, exchange or disposition of shares stock, the identifiable amount of the vendor/transferor’s basis for the property sold or disposed plus expenses of sale/disposition, if any, shall be deducted from the consideration contracted to be paid. In case, however, that the fair market value of the shares of stock sold is greater than the amount of money received, the excess of the fair market value of the shares of stock sold over the amount of money received as consideration shall be deemed as gift subject to the donor’s tax, unless shown to have been made at arm’s length and free from donative intent. (BIR Ruling No. OT-201-21, June 08, 2021).
- The transfer of title of the property by the trustee in favor of the beneficiaries, who are the beneficial owners is not subject to capital gains tax and VAT. There is no sale, exchange or disposition of real property involved, since it is ostensibly just for return of the property to the legal owner and merely acknowledges, confirms and consolidates the legal title and beneficial ownership over the property. (BIR Ruling No. OT-203-21, June 08, 2021).
- Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations shall be exempt from the value-added tax. However, that the exemption from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject to the requirements on restrictions on vessel importation and mandatory vessel retirement program of Maritime Industry Authority (MARINA). (BIR Ruling No. VAT-204-21, June 2021).
- If the LGU lacks resources to provide for basic services to the homeowners’ association, the latter shall endeavor to provide the same. In recognition of the associations’ efforts to assist the LGUs in providing these basic services, association dues and income derived from rentals of their facilities shall be tax-exempt, 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. However, if the LGU does not support the association not because it lacks resources but because it does not want to provide financial support to the program involving private properties, Therefore, it shall be subject to applicable internal revenue taxes on its income from association dues, rentals of their facilities, trade business and other activities (BIR RULING NO. OT-206-21, June 15, 2021).
- Homeowner’s associations shall complement, support and strengthen local government unit in providing vital services to their members and help implement local government policies, programs, ordinances, and rules.
- Furthermore, income derived from association dues, membership fees, other assessment and charges collected in a purely reimbursement basis and rentals of facilities is exempt from income tax, value-added tax 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. (BIR RULING NO. OT-207-21, June 16, 2021).
- A non-stock and non-profit corporation with primary purpose of being an educational institution is exempted from income tax and VAT only on revenues or receipts generated from:
- Tuition fee and other school fees: and
- Income derived from the operation of cafeterias/canteen, dormitories, and bookstores located within its premises, owned and operated by the corporation to be actually, directly and exclusively used for educational purposes.
- However, the corporation is liable to all other including those below:
- Income derived from any of its properties, real or personal, or any activity conducted for profit, which income should be returned for taxation unless they are actually, directly and exclusively used for educational purposes;
- If engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental thereto, its revenues derived therefrom shall be subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos (Php3,000.000.00), or the 3% percentage tax, if the gross receipts do not exceed Php3,000.000.00;
- Acts as an employer and its employees receive compensation income subject to the withholding tax. (BIR RULING NO. SH30-208-21 & SH30-209-21, June 16, 2021).
- Merger between two (2) non-profit civic associations/organizations and consequent transfer of the property is not qualified as a tax-free merger. There must be an exchange of property solely for stock in another corporation. It is clear that in order to qualify as an exception to the recognition of the gain or loss upon the sale or exchange of property, a corporation which is a party to a merger exchanges its property solely for stock in another corporation which is also a party to the merger. (BIR RULING NO. S40M-210-21, June 16, 2021).
- Joint ventures involving foreign contractors may also be treated as a non-taxable corporation only if a member foreign contractor is covered by a special license as contractor by the Philippine Contractors Accreditation Board (PCAB) of the Department of Trade and Industry (DTI).(BIR RULING NO. JV-211-21, June 16, 2021).
