BIR Ruling No. 703-2019

REPEBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU CF INTERNAL REVENUE

Quezon City

Section 24{D} (l} of the

BIR Ruling No. 1326-2018 National Code of 1997, as aimended NOV 2 5 21 0703-202 Internal Revenue

VICTOR L. CHING BARBARA D.VERDEBLANCO Pound St., Villa Arca II Sutd.. Baesa, Quezon City

Sir/Madam:

ruling. relative to the Absolute Deed of Exchange you executed On October 27, 2017. This refers to your letter dated November 22, 2017, requesting for the issuance of a

for Quezon City, bounded and described as follows: covered by Transfer Certificate of Title (TCT) No. It is representea that Barbara D. Verdeblanco is theregistered owner of a parcel of land of the Registry of Deeds

being a porion of Lot 21, Biocx 4, PSD-13-016858, LRC Record No. 5975)l situated in Barangay Baesu, ?uezon City, Metro Manila. area of jifty (50) square me:ers, more or less. "A parcel of lana (is: 21-B of the Subdivision Plan PSD-00-077630. containing an

by TCT No. tescribed as folows: On the other hand. Vicrsr L. Cririg is the registered owner of a parcel of iand covered Df the Registry of Deeds for Quezon City, bounded and

being a portion of Lot 21, L:cck 4, PSD-13-016858, LRC Record No. 5975) .situated in Barangay Baesu, Juezon City, Metro Manila, . area of fifiy (50) square meters, more or less. A parcel of lana (Iox 21-4 of the Subdivision Plan PSD-00-077630. containing ar

determine the lawful ownership in ti:e satd parcels of land. Hence, this request. Mas an error in your respective properties. You inadvertently overlooked the inaccuracy of iand description described in the said TCTs that resulted to the swapping/switching of the iand description' in particular the lot nn-- No. 21-A described in TCT N executed an Absoiute Deed of Exekiarge to effectively rectify the said TCTs and finally Varistin saa It is further represented that it w as only on October 2017 when you noticed that there is truly and legally owned by Victor L. Ching. Thus, on October 27, 2017, you while the parcel of land with Lot No. 21-B described in TCT No. spective TCTs. The parcel of land with Lot s truly and legally owned by Barbara D.

Coce of 1997, as amended, states thar: in reply, piease be informed itat Section 24(D)(1) of the National Internal Revenue

SEC. 24. Incone Tux Kai23.

: XXX XXX 1D: Capittl Gains from Sale f Raul Property.

NOV 2 5.20ts VICTOR L. CHING/BARBARA D. YERDE3LANC:

(I) In Genervl. - Tt:e Li svisions of Section 39(B) notwithstanding, afinal tax of six percent (6%) bused on ihe gross selling price or current fair market

value as determined in accorcance with Section 6(E) of this Code, whichever is

higher, is hereby imposed :ipon capital gains presumed to have been realized

from the sale, exchange, or sther disposition of real property located in the Philippines, classified as cap.u' ussets, including pacto'de retro sales and other forms of conditional sales, oy iraividuals, including estates and trusts: Provided. That the tax liability, if any, Sn gains from sales or other dispositions of real property to the government or :ny of its political subdivisions or agencies or to government-owned or controlied corporations shall be determined either under Section 24 (A) or under this Subsection, at the option of the taxpaver." (Emphasis

supplied)

In the case of Salud vs. Cor:imissioner of Internal Revenuet, the Court of Tax Appeals had the occasion to rule that the Natior:al Internal Revenue Code of 1997, as amended, does not define nor qualify the phrase "otner disposition". It is clear, plain and therefore must be applied without attempted or strained interpretation. It shall be construed in its plain and simple meaning. "Disposition" means an act of Jisposing: transferring to the care or possession of another; the parting with, alienation of, or giv ing up property?

Applying the above ruling of tre Court, it is therefore ciear that the phrase "other disposition" includes within its purviex ali kinds of dispositions of real property under Section 24 (D) (1) of the National internal Revenue Code of'1997, as amended,"unless specifically excluded therefrom or subject to arother tax treatment pursuant to different provisions of the National Internal Revenue Code of 1-97. as amended. Thus, the Absolute Deed of Exchange dated October 27, 2018 executed y6:, in the absence of a specific law excluding it from the coverage of Section 24 (D) (1) of th: National internal Revenue Code of 1997, as amended, is deemed included within the purview Si the said provision. Therefore, it shall be subject to the capitai gains tax (CGT) imposed therein.

Moreover, the conveyanee being a disposition of real property under Section 24 (D) or the National Internal Revenue Code of i997, as amended,' is likewise subject to the documentary stamp taxes (DST) iuposed in Section. 188 and Section 196 of the National Internai Revenue Code of 1997, as amerided.

Please be guided according...

Very truly yours.

e 5 5

K-I-LMAT Commissioner of Internai Revenue CAESAR R. DULAY 030561

2 Black's Law Dictionary, 6th Edition CTA EB Case No. 412 dated April 30, 2CC9

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