VAT Exempt Threshold on Sale of Real Properties

Since President Rodrigo Duterte vetoed certain provisions of the Corporate Recovery and Tax Incentives for Enterprises (Create) or Republic Act (RA) No. 11534, including the proposed increase of the value-added tax (VAT) exemption threshold on sale of real property under Section 109(P) of the National Internal Revenue Code, as amended (Tax Code), there seems to be a question as to what is the current VAT-exempt threshold for the sale of real properties in the ordinary course of trade or business.

The President’s veto made ineffective the amendments introduced by the Create Act to increase the VAT-exempt thresholds under Section 109(P) of the Tax Code. Thus, the old provision, as amended by the Tax Reform for Acceleration and Inclusion (TRAIN) Law (RA 10963) remains.