BIR Ruling No. 528-2017

REPUBLICOPTHE HILIPPINES

DEPARTMENT'OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Sec.24,RA 7916 BIR Ruling No.008-99&

Da636-04 5282017

11-172017

Cabuyao, Laguna DEL MAR DE AZUL LAND,INC. West Road LISP I, Diezmo

Attention: Mr. Jerry W. Doviak President and CEO

Gentlemen:

the sale by CCMC Land, Inc.(CCMCLI),a PEZA-registered enterprise,of parcels of land to Del Mar De Azul Land,Inc.(DMDALD,also a PEZA-registered enterprise, is not subject to documentary stamp tax (DST), for purposes of claiming a refund of the DST paid thereon. This refers to your letter dated March 21, 2016 requesting, in effect, for a ruling that

laws of the Philippines with office address at CCMC Compound, West Road, Light Industry & Science Park i, Brgy.Diezmo,Cabuyao Laguna. It is registered with the Bureau of Internal Revenue under Certificate of Registration No. Documents show that DMDALI is a corporation duly organized and existing under the dated July 31, 2015.

the laws of the Philippines with office address at 1029 EDSA, Quezon City. On the other hand, CCMCLI is a corporation also duly organized and existing under

Registration Certificate No. Enterprise at Light Industry & Science Park of the Philippines. DMDALI is registered with the Philippine Economic Zone Authority (PEZA), under dated December 23, 2015, as an Ecozone Facilities

International Park, Carmelray industrial Park II, Laguna Technopark-SEZ, Cavite Economic Zone, Light Industry & Science Park III and Suntrust Ecotown Tanza. dated September 5, 2000, as Ecozone Facilities Enterprises at Calamba Premiere Likewise, CCMCLI is registered with PEZA, under Registration Certificate No.

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Page 2 of 3 Del Mar De Azul Land, Inc.

as CCMC -- Celestica Building II located at CCMC Compound, West Road, Light Industry & Science Park 1, Brgy. Diezmo, Cabuyao, Laguna covered by TCT Nos. CCMCLI is the absolute and registered owner of two (2) parcels of industrial lots identified containing a total area of 1,427 square meters. and

DMDALI whereby the former transferred to the latter the above-described property for On January 14, 2016, a Deed of Absolute Sale was executed by and between CCMCLI and

DMDALI and CCMCLI paid the documentary stamp tax, on the sale of the above-mentioned property, amounting to In order to effect the issuance of the Certificate Authorizing Registration (CAR), both on February 4, 2016 at BPI-Binan Capinpin branch.

known as "The Special Economic Zone Act of 1995", as amended by RA 8748 provides - In reply, please be informed that Section 24 of Republic Act (RA) No. 7916, otherwise

thereof, five percent (5%) of the gross income earned by all business enterprises within the ECOZONE shall be paid and remitted as follows: taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. In lieu "SEC. 24. Exemption from National and Local Taxes. - Except for real property

b. Two percent (2%) which shall be directly remitted by the business a. Three percent (3%) to the National Government; establishments to the treasurer's office of the municipality or city where the enterprise is located. "

establishments operating within the Ecozone. Instead, all business enterprises within the Ecozone are imposed a preferential tax rate of five percent (5%) based on gross income earned from operation within the Ecozone that is being managed and operated by the PEZA as a separate customs territory. Thus, except for real property tax, no taxes, local and national, shall be imposed on business

expenses or incidental losses during a given taxable period (Section 2 (nn), Rule I of the Rules and revenues derived from business activity within the Ecozone, net of sales discounts, sales returns and allowances minus cost of sales or direct costs but before deduction is made for administrative Regulations implementing RA 7916). The term "gross income" as used in the above-cited provision, refers to gross sales or gross

Page 3 of 3 Del mar De Azul Land, Inc #528m20 17 1117m2017

within the Ecozone by a PEZA-registered enterprise to another PEZA-registered enterprise is not subject to the corresponding DST, but subject to the 5% preferential tax rate based on the gross income earned pursuant to Section 24 of R.A. No. 7916. (BIR Ruling No. 008-99 dated January 19, 1999 and DA-636-04 dated December 15, 2004) In several cases, this Office had occasion to rule that the sale of a property located

preferential tax rate based on the gross income earned pursuant to Section 24 of R.A. No. 7916, Ecozone by CCMCLI, a PEZA-registered enterprise to DMDALI, another PEZA-registered enterprise, is not subject to the corresponding documentary stamp tax, but subject to the 5% as amended by R.A. No.8748. In view of the foregoing, the sale of the two (2) parcels of industrial lots within the

if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented. However.

Very truly yours,

Mua1y

Commissioner of Internal Revenue CAESAR R. DULAY

011166

K-1-MCUS