BIR RULINGS
- Sale of house and lot under economic and low-cost housing project of a company duly registered with the Board of Investments under Executive Order (EO) No. 226 is exempt from income tax and creditable withholding tax on its income received directly in connection with the mentioned project.
- The tax treatment will be applied to socialized house and lot units sold to qualified beneficiaries.
- In addition, sale of house and lot and other residential dwellings with selling price of not more than Php 3,199,200 is VAT exempted.
- Units used for commercial purposes such as leasing, retail stores, offices and etc. shall be subject to the payment of appropriate taxes. (Certificate of Tax Exemption No.: BOI-LEH-100-2022, PSH-105-2022, PSH-106-2022, PSH-107-2022, PSH-108-2022, BOI-LEH-109-2022, BOI-LEH-110-2022, BOI-LEH-111-2022, BOI-LEH-112-2022)
- Transfer of shares under a global restructuring plan from one company to another in the form of additional paid-in capital, without the issuance of additional shares of stock is deemed as capital investment and not subject to capital gains tax, income tax and donor’s tax.
- It is excluded in the computation of taxable income as they are not considered profits or earnings derived from normal business operations.
- The transfer is not considered to be a sale, barter or exchange as the transfer was made pursuant to global restructuring plan.
- Also, it is not subject to donor’s tax as there is no intention to donate. (BIR Ruling No: BOT-101-2022, March 25, 2022)
- Dacion en pago of real properties held for investment purposes will be:
- Subject to 6% capital gains tax (CGT) – actual use of the property will determine whether it is an ordinary asset or capital asset.
- Subject to documentary stamp tax (DST) for the conveyance of real property
- Exempted from creditable withholding tax (CWT) and value-added tax (VAT) (BIR Ruling No: OT-102-2022, March 25, 2022)
- 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 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 (Certificate of Tax Exemption NO: SH30-103-2022, March 25, 2022)
- Declaration or distribution of property dividends to shareholders are exempt from income tax.
- The company does not realize any gain on the declaration of shares and thus are not subject to capital gains tax.
- Also, the declaration or distribution of shares of stocks as dividends is not a sale, barter or exchange and does not have a donative intent is likewise not subject to VAT or donor’s tax
- Intercorporate dividends – dividends received by a resident foreign corporation from a domestic corporation shall not be also subject to income tax and consequently to withholding tax. (BIR Ruling No. OT-092-2022, March 10, 2022)
