BIR Ruling No.

063-2018 dated 24 January 2018

Facts:

ABC Homeowners’ Association requested for a Certificate of Tax Exemption enjoyed by Homeowners’
Associations under RA No. 9904, as enunciated in RMC No. 9-2013. The Office of the Municipal Mayor of
Nasugbu, Batangas certified that ABCHomeowners’ Association funds the basic services for its
homeowners or members and that the local government cannot cater to such services for lack of
resources.

Issue:

Is ABC Homeowners Association entitled to tax exemption?

Ruling:

Yes. Considering that ABC Homeowners’ Association is a duly registered Homeowners Association with
the Housing and Land Use Regulatory Board (HLURB); that its financial statements show the delivery of
basic community services defined under Section 3 (d) of RA No. 9904; and that the local government
unit covering the jurisdiction of the Homeowners Association has issued a Certificate that it lacks the
resources to provide these services to the Association, the income of ABC Homeowners’ Association
derived from association dues and rental facilities is exempt from income tax and VAT 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.