RMC No. 35-2012: Clarifies the taxability of clubs organized and operated exclusively for pleasure, recreation and other non-profit purposes

Key points

1. Income Tax. The income of recreational clubs from whatever source, including membership fees, assessment dues, rental income and service fees, is subject to Income Tax.
2. VAT. Any person selling goods or services is liable to VAT, whether or not it is a non-stock, non-profit private organization or a government entity. The gross receipts of recreational clubs, including membership fees, assessment dues, rental income and service fees, are subject to VAT.

Who is affected

• Recreational clubs