BIR Ruling No. 481-2017

REPUBLICOF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Sec." 2 (t) of Revenue Bulletin

BIR Ruling No. 648-12 BIR Ruling No. 264-15 No. 01-03

L01-2017

LAC Center, 2518 teiva Street LOPEZ AND CO. Sta. Ana, Manila

Attention: Mr. RESTITUTO T. LOPEZ -- Senior Partner

Sir:

This refers to your letter dated October 17, 2016 requesting for tax ruling rcgarding the proposed sale of real property of SPENCERS LANDHOLDINGS, INCORPORATED to a tax- exempt school duly accredited by the Commission on Higher Education (CHED).

The facts as stated in your letter are as follows:

Philinpine Securities And Exchange Commission, With' SEC: Reg. No. development. It is a VAT-registered taxpaver with registered office address at "Spencers Landholdings. Inc. ("Seller") was registered with the on January 12. 1994 primarily to engage in real estate property

LAC Center. 2518 Leiva St.. Sta. Ana. Manila. It has not started comnercial operation fr-om the time it was incorporated.

The (Compunv's Bourd of Directors huve decided to sell its real property to a tax-exempt school. which is a non-stock, non-government organization.

consists of land and property development und is part of Property and The real property umounting to as of Decemher 31, 2015

Equipment account per its 201 5 Audit Report and not part of inventory on hund.

In addition. the property's planned development did not push through umd subject property hecame idle and therefore noi held for sale nor held for Iease in the ordinury course of Spencers ' trade or business.

From incorporation date onwards. seller did not realize nor generate

yearly administrative expenses. Its statement of changes in equity showed cumulative tosses of : uny revenues. Its stutement of comprehensive loss was brought about by its for the year ended December 31' 2015.

(Commission on Higher Education (CHED). The target buyer is a tax-exempt school duly accredited by the

You now request for confirmation of the following issues:

b) whether the sale witi be subject to final tax of 6% and documentary stamp tax of t .5% a) whether the proposed sale transaction of Spencers Landholdings to the tax-exempt or the property or will be treated as ordinary asset subject to 5% Creditable Withholding schoot will be exempt from Value-Added Tax: and Tax and Ordinary Income Tax of 30%?

LOPEZ AND CO. RE: SPENCERS LANDHOLDINGS. INC

In reply, please be intormed that under Revenue Bulletin No. 01-03. thc ruling funetion is limited to the determination of purcly legal issues, as opposed to questions of fact. Accordingly, the Revenue Bulletin declared certain issues or subject matter as "No-Ruling Areas", on which the appropriate office of the Bureau is hereby instructed not to accept any request for rulings covered hy said Revenue Bulletin or any amendments thereto.

Section 2 (t) of Revenue Bulietin 01-03 provides:

construed und identified as "No-Ruling Areas": -SF(TIO)N 2. List of No-Ruling Areas. The following shall herehy he

XXX XXX XXX

{} Reyuest for rulings on issue's or transactions based on hypothetical situations.

XXX XXX XXX

In view of your representation that the transaction is neither existing nor partially executed. this Office cannot as yet issue a definitive ruling or opinion on the above mattel considering that the issue is based on hypothetical situation, which is considered as a "No- Ruling Area" pursuant to Section 2 (t) of Revenuc Bulletin 01-03. (BIR Ruling No. 264-15 dated July 30. 2015 and B1R Ruling No. 648-12 dated December 07, 2012)

these transactions arc executed by the concerned parties. Be that as it may. we would be glad to assist you should you request for a ruling when

Please be guided accordingly.

Very truly yours.

cw

Commissioner of Internal Revenuc CAESAR R. DULAY 010130

K-I-RS K1-FR-16-1969