Are HOA dues taxable? Income tax, VAT and receipts for dues
This page is for the treasurer or board of a homeowners' association (HOA) who has been asked whether the dues are taxed, whether to charge VAT, and whether the association needs BIR-registered receipts. By the end you will know what the law, the BIR and the Supreme Court say, and which questions only your Revenue District Office (RDO) can answer.
PhilForms makes an HOA receipt and a statement of account for dues, and fills the BIR registration form. It does not decide your association's taxes.
The law: RA 9904, section 18
The Magna Carta for Homeowners and Homeowners' Associations says that "association dues and income derived from rentals of their facilities shall be tax-exempt", provided that the income and dues "shall be used for the cleanliness, safety, security and other basic services needed by the members, including the maintenance of the facilities" of the subdivision or village (RA 9904, sec. 18).
The BIR's rule for HOAs: RMC 9-2013
The BIR's circular on HOA dues reads section 18 as an exemption you must qualify for. Without it, the circular treats dues as income subject to income tax, VAT (or percentage tax) and withholding (RMC 9-2013). It says dues and rental income "may be exempted from income tax, VAT and percentage tax" when:
Condition · What it asks for (RMC 9-2013); a · The HOA is a duly constituted "Association" under RA 9904, section 3(b); b · The city or municipality issues a certification naming the basic services the HOA renders and stating the LGU's lack of resources to render them; c · The HOA shows proof, such as financial statements, that the dues and income are used for cleanliness, safety, security and other basic services
The BIR confirms this exemption with a Certificate of Tax Exemption (CTE). A CTE issued to an HOA under RA 9904 and RMC 9-2013 does not expire after three years; it stays valid "unless recalled or revoked by the BIR for valid grounds" (RMC 123-2024). Ask your RDO how to apply.
What the Supreme Court held for condominiums
In *BIR v. First E-Bank Tower Condominium Corp.* (G.R. Nos. 215801 & 218924, January 15, 2020) the Supreme Court struck down RMC 65-2012, the BIR's circular for condominium corporations, and held that "association dues, membership fees, and other assessments/charges are not subject to income tax, value-added tax and withholding tax" (G.R. No. 215801). Dues "do not arise from transactions involving the sale, barter, or exchange of goods or property. Nor are they generated by the performance of services" (same decision).
The case was about a condominium corporation; the decision does not mention homeowners' associations, and the BIR still cited RMC 9-2013 for HOAs in November 2024 (RMC 123-2024). Whether the ruling helps your HOA is a question for the BIR or a tax lawyer, not something to assume.
Two numbers people mix up: the circular the Court struck down is RMC 65-2012; BIR RMC 65-2020 only announces when RA 11467 took effect (RMC 65-2020).
Registering the association with the BIR
The BIR's registration form for associations is BIR Form 1903, "Application for Registration for Corporations, Partnerships (Taxable/Non-Taxable), Including GAIs, LGUs, Cooperatives and Associations"; its taxpayer types include "Non-Stock, Non-Profit Organization", and its requirements list the certificate of registration from the HLURB, now DHSUD (BIR Form 1903). Fill it here: BIR Form 1903.
Which returns the association files is written on its Certificate of Registration — ask your RDO. The BIR's annual return for a non-individual taxpayer exempt under the Tax Code or special laws "with NO other taxable income" is BIR Form 1702-EX (BIR Form 1702-EX).
Receipts for dues
Since the Ease of Paying Taxes Act, the invoice is the document of a sale of goods or services; an official receipt, collection receipt or acknowledgment receipt is a "supplementary document" — proof of payment — and is "not valid proof to support the claim of input taxes" (RR 7-2024, secs. 2 and 6). Whether your association must register invoices is for your RDO to say, and depends on how it is registered.
PhilForms's HOA receipt for dues is printed as an acknowledgment receipt with "THIS DOCUMENT IS NOT VALID FOR CLAIM OF INPUT TAX." and no VAT lines unless you switch them on. The HOA statement of account adds the fines your board set: RA 9904 lets the board charge "reasonable fines for late payments" after due notice and hearing, under a schedule adopted by the board and furnished to the homeowners (RA 9904, sec. 12(c)).
Questions
Subject ba sa tax ang HOA dues? RA 9904 makes dues and facility rentals tax-exempt when used for basic services (RA 9904, sec. 18). The BIR applies it only when the HOA meets three conditions, including an LGU certification and financial statements (RMC 9-2013) — ask your RDO about a Certificate of Tax Exemption.
Is HOA dues VAT-able? Under RMC 9-2013 the BIR treats HOA dues as subject to VAT or percentage tax unless the RA 9904 exemption applies (RMC 9-2013). For condominium corporations, the Supreme Court held dues are not subject to VAT (G.R. No. 215801).
Kailangan ba ng BIR-registered OR ang HOA? An official, collection or acknowledgment receipt is now only a supplementary proof of payment; the invoice is the document of a sale (RR 7-2024). Whether your association must register invoices is for your RDO to say.
Which BIR form registers our HOA? BIR Form 1903, with taxpayer type "Non-Stock, Non-Profit Organization" (BIR Form 1903).
Last checked 2026-10-23. Not affiliated with BIR, SSS, PhilHealth, Pag-IBIG or any government agency.