[ manilatimes.net ] July 15, 2011
THE Department of Finance said the value-added tax (VAT) would apply to properties forming part of real estate investment trusts.
“It is VATable according to the revenue regulation that I recently signed since there is nowhere in the Tax Code that states that the transfer is exempt from the payment of VAT,” Finance Secretary Cesar Purisima told reporters on Thursday.
“The imposition of VAT is the biggest issue for investors in the RR for REIT. But there is input-output arrangement [wherein the payment of VAT on the input may be credited against the output],” he said.
“Let’s just have it [RR] out first, which is scheduled by next week.
Then let’s see what happens. We are in constant dialogue with the
interested investors,” he added.
The REIT Act lapsed into law in December 2009 but its implementation has been put on hold as fiscal authorities and corporate regulators failed to agree on the rule on the public ownership cap, among others.
REITs are companies that own and operate income-generating real estate assets, which include offices, apartment buildings, hotels, warehouses, shopping centers and highways.
Property developers led by Ayala Land Inc., SM Prime Holdings Inc. and Robinsons Land Corp. had expressed interest in undertaking REIT offerings.
The REIT Act is expected to incur a P10 billion revenue lesion to the government upon its first year of implementation.
Katrina Mennen A. Valdez
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