BIR Ruling No. 507-2017

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quczon City

RA 727 BiR Ruling No.005-1

7-7

#1827 (po St.. NAPICO. Manggahan. Pasig City NAPICO HOMEOWNERS ASSOCIATION HI.INC

Attention: Ernesto A. Vallota Sr. President

Gentlemen:

Association H. Inc. in favor of its qualitied nember-bencficiaries' pursuant to Republic payment of taxes refative to the transter of title of land from Napieo Homeowners Act 7279 otherwise known as the "Urban Development and Housing Aet of 1992". This refers to your letter dated October 17. 2016 requesting exemption from the

Out/paid on March 22. 2002 in the loan amount of Php Registration No. Community Mortgage Program (CMP). with the National Housing Authority (NHA) as Originator. per Certification dated Octoher 14, 2016 issued by the Social Housing Finance Corporation (SHFC): that based on sane Certitication. said project was taken- Homeowners Association Hl. Inc.. is now in the process of subdividing the subject area of 386 square meters. covered by Transter Certificate of Tite No. issued by the Registry ot Deeds for the City of Pasig: that it is a non-stock. non-profit organization duly registered with the Home Insurance and Guaranty Corporation under parcel of land in favor of' iis member-beneficiaries. Identification No. It is rcpresented that Napico Homeowners Association l1. Inc.- with Taxpayer's : that the aforesaid lot was acquired through a loan under the is the registered owner of a parcel ot Jand. with an and that Napico

the individual members-beneficiaries of the Association is not subiect to either the amended. or the creditable withhoiding tax (('w"I) imposed under Revenue Regutations (RR) No. 2-98. as amended. considering that said transfer is being made without any monetary consideratien. The transfer is onty a formality to finatly effect the transfer of the subject property to its member-beneticiaries who actually bought the capital gains tax (CGT) imposed under Seetion 27 (D) (5) of the Tax Code of 1997, as same from the former owner through the Association. In other words. the association is merely transferring the ownership of the property to its memher-beneficiaries who actually o n the sane. In reply- please be informed that the transfer of the subdivided lots in favor of

1 picase see attached Masterlist of Beneficiaries consisting of seven (7) pages and containing 135 beneficiaries.

Napico Homcowners Association H. tne 0

Page 2 of 2

Furthermore. the said transter :s not subject to the donor's tax imposed under Seetion 99 of the Tax Code of 1997. since there is no donative intent on the part of the Association to donate the property to its members-beneticiaries. considering that it could not donate property the ownership ot which already beiongs to the members- bencticiaries themselves.

It is noted that under Scrtio* 196 of the Tax Code of 1997. the deeds or doeuments subject to the documentary stamp tax (DST) inposed therein are those where the reatty sold are granted. assigned. transferred. or otherwise conveyed to a purchaser or purchascrs or to any othes person or persons designated by such purchaser or purchasers. therehy exeluding from its purview the instant case eonsidering that the supposed purchasers are actually the owpers thereof. Besides. no consideration is involved in said transaction upon which the tax imposed could he hased. Aceordingly. the transfer of the subdivided lots in tavor of the beneficiaries is not subiect to DST under Section 196 of the T'ax Code of 1997. However. the notarial acknowledgment to the deed of conveyance is subicet to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of +99?.

It is. however. understood that the Certifieate Authoriving Registration (CAR) shall only be issued after the submission of the requirements provided under RMO) 15 2003 and after it is established upon proper verification by the Revenue District Offieer (RDO) conccrned that. considering the rules on vatuation on rea: property. the actual selling price per saie transaction in this case does not exceed and lot anu tor lot onty tor each quatitied beneficiaries. tBIR Ruling No. for house

005-11 dated.omuary 19. 201)

This ruling is being. issued on the basis of the toregoing facts as represented. However. if upon inv estigation. it will be disclosed that the tacts are different. then this. ruling shall he considered null and void

Very' truy your. Aww

( on.n'issicner of {tternal Rever CAESAR R. DULAY 010`778

2 HUDCC Resolution No. 1, Scrics of 2013, promuigated on October 15, 2013, approving thc adjustment of price ceiling for horizontal socialized hous:ng from per house and iot to