Good news for those covered by VAT ! VAT treshold increased

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PROPERTY OWNERS can enjoy added relief from value-added taxes (VAT) as the Bureau of Internal Revenue (BIR) has increased the threshold values for taxable real estate.

Revenue Regulations 16-2011, issued yesterday, amends the threshold amounts in the Consolidated VAT Regulations of 2005 using the National Statistics Office’s 2010 Consumer Price Index data for 2010.
According to the issuance, a residential lot sold for P1,919,500 and below and a residential house and lot sold for P3,199,200 and below will be exempted from the 12% VAT.
Adjacent lots, even if they are covered by separate titles and tax declarations, can be counted together when sold to one buyer. The lots will be VAT-exempt as long as the aggregate value does not exceed the P1,919,500 limit.
The previous threshold amounts were P1.5 million for residential lots and P2.5 million for house and lots, as stated in the VAT law.
The government imposed the exemptions to mitigate the impact of the VAT increase from 10% in 2005. The threshold amounts are scheduled to be increased every three years. Properties with selling prices exceeding these ceilings are subject to VAT.
The lease of residential units -- apartments, dormitories and the like -- with a monthly rent of P12,800 and below will also be VAT-free under the new regulations. The previous threshold amount was P10,000.
The BIR also extended the VAT exemption to leased residential units with rents of over P12,800 as long as the lessor’s aggregate rentals do not exceed P1,919,500 for the year. These, however, will be subject to a 3% percentage tax.
The new regulations will take effect starting January 1, 2012.

Published 03 November 11 03:14 by Genevieve (Gigi) Bonquin REB 2309 REA 5754 REC 9
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