Buwanang association dues ng condominium, dapat walang VAT

ni Atty. Persida Rueda-Acosta @Magtanong Kay Attorney | August 22, 2025

Dear Chief Acosta,

May katanungan ako ukol sa binabayaran ko buwan-buwan sa condominium ko bilang isang unit owner. Dahil sa gusto kong malaman kung anu-ano nga ba ang binabayaran ko, humingi ako ng breakdown ng buwanang koleksyon ng condominium corporation kung saan ako nakatira. Napansin ko na naniningil sila ng Value Added Tax (VAT) sa aking association dues. Upang makumpirma kung ganito rin ang ginagawa ng ibang condominium corporations, tinanong ko ang aking katrabaho na isa ring unit owner sa ibang condominium. Ngunit ayon sa kanya, ang kanilang association dues ay walang sinisingil na VAT. Nais kong malaman kung ang paniningil ng VAT sa association dues ay naaayon sa ating batas. – Roberto

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Dear Roberto,

Una sa lahat, ang National Internal Revenue Code (NIRC) ay inamyendahan sa pamamagitan ng Republic Act (R.A.) Nos. 8424 (Tax Reform Act of 1997) at 10963 (Tax Reform for Acceleration and Inclusion [TRAIN]). Kaugnay nito, sa kasong napagdesisyunan ng ating Korte Suprema na pinamagatang First E-Bank Tower Condominium Corp vs. Bureau of Internal Revenue (G.R. No. 215801, 15 Enero 2020, isinulat ni Kagalang-galang na Kasamang Mahistrado Amy C. Lazaro-Javier), inilahad na ang association dues, membership fees at iba pang assessments/charges ay hindi maaaring patawan ng value added tax (VAT). Ayon dito:

“Association dues, membership fees, and other assessments/charges do not arise from transactions involving the sale, barter, or exchange of goods or property. Nor are they generated by the performance of services. As such, they are not subject to value-added tax per Section 105 of RA 8424, viz.:

Section 105. Persons Liable. - Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 to 108 of this Code.

The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. This rule shall likewise apply to existing contracts of sale or lease of goods, properties or services at the time of the effectivity of Republic Act No. 7716.

The phrase ‘in the course of trade or business’ means the regular conduct or pursuit of a commercial or an economic activity including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a non-stock, non-profit private organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or government entity.

The rule of regularity, to the contrary notwithstanding, services as defined in this Code rendered in the Philippines by nonresident foreign persons shall be considered as being course of trade or business.”

Ang isang condominium corporation ay hindi idinisenyo upang makisali sa mga aktibidad na lumilikha ng kita. Bagama’t ang isang condominium corporation ay pinahihintulutan na mangolekta ng mga association dues, ito ay para lamang sa kapakinabangan ng mga may-ari ng condominium units. Ito ay kinakailangan upang epektibong pangasiwaan, mapanatili, o mapabuti ang mga “common areas” ng condominium. Ang mga association fees at iba pang mga singilin ay hindi bumubuo ng kita o pakinabang sa condominium. Ang mga gastusin ng condominium corporation, kaisa ang mga may-ari ng condominium units, ay hindi nilalayon upang makabuo ng kita o katumbas ng halaga ng paggawa ng negosyo. Binanggit din sa kasong nasa itaas na:

“Both under RA 8424 (Sections 106, 107,52 and 108) and the TRAIN Law, there, too, is no mention of association dues, membership fees, and other assessments/charges collected by condominium corporations being subject to VAT. And rightly so. For when a condominium corporation manages, maintains, and preserves the common areas in the building, it does so only for the benefit of the condominium owners. It cannot be said to be engaged in trade or business, thus, the collection of association dues, membership fees, and other assessments/charges is not a result of the regular conduct or pursuit of a commercial or an economic activity, or any transactions incidental thereto.

Neither can it be said that a condominium corporation is rendering services to the unit owners for a fee, remuneration or consideration. Association dues, membership fees, and other assessments/charges form part of a pool from which a condominium corporation must draw funds in order to bear the costs for maintenance, repair, improvement, reconstruction expenses and other administrative expenses.”

Kaya naman tungkol sa iyong katanungan, batay sa ating batas at nabanggit na kasong napagdesisyunan ng ating Korte Suprema, malinaw na hindi maaaring patawan ng VAT ang association dues na buwanang sinisingil ng condominium corporation sa iyo.

Sana ay nabigyan namin ng linaw ang iyong katanungan. Ang payong aming ibinigay ay base lamang sa mga impormasyon na iyong inilahad at maaaring magbago kung mababawasan o madaragdagan ang mga detalye ng iyong salaysay.

Maraming salamat sa iyong patuloy na pagtitiwala.