In case of mixed transactions the abovementioned rule

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

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.