In case of mixed transactions the abovementioned rule should be observed The

In case of mixed transactions the abovementioned rule

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In case of mixed transactions, the abovementioned rule should be observed. The term 'residential units' shall refer to apartments and houses & lots used for residential purposes, and buildings or parts or units thereof used solely as dwelling places (e.g., dormitories, rooms and bed spaces) except motels, motel rooms, hotels, hotel rooms, lodging houses, inns and pension houses . The term 'unit' shall mean an apartment unit in the case of apartments, house in the case of residential houses; per person in the case of dormitories, boarding houses and bed spaces; and per room in case of rooms for rent. Illustration 1: A lessor rents his 15 residential units for P14,500 per month. During the taxable year, his accumulated gross receipts amounted to P2,610,000. He is not subject to VAT since the monthly rent per unit does not exceed P15,000. He is also not subject to 3% Percentage Tax. Using the same example, assuming he has 20 residential units with the same
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Copyright 2019 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia Second Release 2019 33 monthly rent per unit and his accumulated gross receipts during the taxable year amounted to P3,480,000, he is still not subject to VAT even if the accumulated earnings exceeded P3,000,000 since the monthly rent per unit does not exceed P15,000. He is also not subject to 3% Percentage Tax. Illustration 2: A lessor rents his 15 residential units for P15,500 per month. During the taxable year, his accumulated gross receipts amounted to P2,790,000. He is not subject to VAT since his accumulated gross receipts did not exceed P3,000,000. He is, however, subject to 3% Percentage Tax since the monthly rent per unit is more than P15,000.00. Using the same example, assuming he has 20 residential units with the same monthly rent per unit and his accumulated gross receipts during the taxable year amounted to P3,720,000, he is already subject to VAT since the accumulated earnings exceeded P3,000,000 and the monthly rent per unit is more than P15,000.00. Illustration 3: A lessor rents his 2 commercial and 10 residential units for monthly rent of P60,000 and P15,000 per unit, respectively. During the taxable year, his accumulated gross receipts amounted to P3,240,000 (P1,440,000 from commercial units and P1,800,000 from residential units). The P1,440,000 from commercial units is not subject to VAT since it did not exceed P3,000,000. It is, however, subject to 3% Percentage Tax. On the other hand, the P1,800,000 accumulated receipts from the residential units are not subject to Percentage Tax and exempt from VAT since the monthly rent is not more than P15,000. SDAaTC Using the same example, assuming the lessor has 5 commercial units and his accumulated gross receipts during the taxable year amounted to P5,400,000 (P3,600,000 from commercial units and P1,800,000 from residential units), he is subject to VAT with respect to P3,600,000 since it exceeded P3,000,000. The P1,800,000 accumulated receipts from residential units are not subject to Percentage Tax and exempt from VAT since the monthly rent is not more than P15,000.
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