MANILA – The Court of Tax Appeals (CTA) has turned down the claim for a P3.185 million refund of a Makati condominium corporation which failed to prove that it indeed paid the said amount to the Bureau of Internal Revenue (BIR).
In rejecting the claim for a PHP3.185 million tax refund of Pacific Plaza Condominium Corp., the CTA said it did not prove entitlement to the claim and that the payment to the BIR was erroneous.
The company did not present receipts that proved its entitlement to input tax credits allegedly used to pay the value-added tax (VAT) to the BIR, according to the CTA.
The CTA, citing precedents, said condominium association dues are not subject to VAT since no sale, barter or exchange of goods or properties or sale of a service are involved.
However, the tribunal said the “taxpayer has the burden to show that it has strictly complied with the conditions for the grant of the tax refund. Here, petitioner (taxpayer) is duty-bound to prove every minute aspect of its entitlement to the claimed VAT-refund. In the absence of proof of wrongful payment, the Court has no other recourse but to deny petitioner’s claim for refund of erroneously paid VAT.”
In 2012, the BIR issued a memorandum circular clarifying that association dues, membership fees and other assessments/charges collected by a condominium corporation are subject to VAT since they constitute income payment or compensation for the service it provides to its members and tenants.
It was subsequently struck down and voided by the Supreme Court. (PNA)