BIR Ruling No. 69-2018

REPUBLIC OF THE PHI.,IPPINES DEPARTMENT OF FINANCE BURF,AU O r QH&A*6iIflTVENUE Proclarnation l#o69-a)18 Person to Contact: Chief, Legal and l1-25-2OrB Legislative Division No. 50; Tel. Nos. 926-55-361 927-09-63 Scction I 2l1E)& te6 I of the Tax Code ol t911 CARMENCITA I. N{ORIIE 20-B Avocado Street N,lambaling, Cebu City lvladam: This ret-ers to your letter dated July 28,2016 duly endorsed by Revenue Region No. 13-Cebu City requesting fbr tax exemption on the sale of land betu'een Republic of the Philippines and Camrencita Mome pursuant to Section 35 of Proclamation No. 50. Documents submitted that the Repuhlic of the Philippines is the registered owner of a parcel of land, identified as Lot , being a pofiion of Lot , of the subdivision plan Psd- (LRC) Psd- , L.R.C. Recold No. covered by Transfer Cerlificate of Title (TCT) No. issued by rhe Registry of Deeds fbr Cebu City. T'he aforesaid nrooeftv is situated at Avocado St., Basak, San Nicolas, Cebu City with an area of ( sqllare rneters sq.m.), rnore or less. On May 16,1996, the Republic of the Philippines, through the Board of Liquidator, and Carmencita I. Molre executecl a Deed of Absolute Sale wliereby the owner transferred and conl'eyed the above mentioned property for Pesos (P ) in reply, please be informed that under Section 35 of Proclarnation No. 501, provides that: t(h-heugTerus,s-,St-EcCts.Tv3h'e5elpl roosvisthiEoeniescnoott'pJp-toaiorncnyttilouJntits,otamontdhTeaocsxoseensftsr,ahrF"eyeldneosbh,yvaitihtn,stdsahnaOdtitnlhgiee,r elempt .from all tuxes, Jbes, chat'ges, inxposts, tutct assess'nreris arising .front or occasioned b1, the passirtg o.7" litle over such corporatio,ts o7 the goyernnrcnt in,stitutions to assets Jtoiomct the Tntst and/or .from the private octluisitor or htryer Nationttl Trust irnposed by the Governrnent or any subdit,ision thereof inclttdiig but noi limited to stock Jtbraenssa/enrcl-,ttahxeesli,kecc. tPpirtoavl igdaeidn,s taxes, tlocutnentary stan'tps tax, regi.stt.tttion that in case the said government instihrtions ucquirecl. the said assets by .foreclosure, the nbn-payment of similar tcmes, charges, intposts, ancl assessments shall not be ct bar to the consolielat.ion o/ title in the foreclosing institriions and the subseqtrent passing oJ title to the Trust or the corporations held by the Trust. 1 December 8, 1986

Carmencita I. Morre #o69-2018 Page 2 of 2 1-25-m18 enjoinecTlhoershu.leindoerretrtclmbs1f,etrheqf'esxuicshtenccoerpoorfoationny^srieon/'sdsbsye/vs,ashyaoll-f'ntoutxebse, charges or other ossessrnents in.fat,or qf the got,err.,,neit at-the' tinte o.f ssthtluellorbeh'asn'tts"fbbier:ctPtrooviadetc,l,xthlicertnthueirp{rofciresectlsbf"te"oipmpstitetcdh obligations securecl b), sttch liens." sale or trwtsfir to satisfi; ;;';h pErxiveactueti.veHenotwiOtieerdrs,e'eer rf-f,(eEgcOlt.i)vePN-oM...a.9lrl3cbhewrih0'ic,1h179,w81i7th.9d8r6e,wthaelnl tapxreasn..dc'douratyzoenxercn.ptAioqnusingoran.itsesduetdo ' Inasmuch as EO 93 withdrew tax exernptions providecl under Proclarnation No. 50, hence, Section 21(E) of the 1977 Tax Cbde, aiarnended, shall apply in this instance. The said Section provides that in the case of sale, e"cftangii 6r other disposition of.real property located oitrhrethr efoPrmliislip^poifnbeosndcliatiossnifiseadleassU.yJpinitAuiiviaasuse*rss,, inclucling pacto de retio sales and p.*ri"J inch"rding.estates and trusts, price or current f-air market the Tax Code, whichever_ is a final tax. of six. percent (5?'r,) based on thJ giois selling value as deterrnined in aicoriun"e with Secjio"-O(p) oT higher, is imposed upon'capital gains been realized therefrom. It muit to have the albrementioned provision is be noted that the capitil gaiis tax'm""iion"o under an income tax, the burclei-r of rvhich resti upon the seller which, in this case, is the Board of Liquiclator. It is noteworthy 1o mention that Board of Liquidator is subject to the capital tsaghacaeclienosirondtclaaontxhmceoeefsw5daViietdolriiipvmS_eaepdrocc.seb.e2lydf8l(tobhlnXue8titgtXsioBicvn)aeprosnipftmaittlheegenoatTifnaaistgxsepCnbreceoysidnuJgfr-oo.adfmgltgootvlhhleearvnweemxhbeeicernhcetinspa"egiroeeovanifldcizeyiet.ssdTtefhlii-saiossrmeionsnttihaliynel goverrunental function shall be excluded lroin its gross income. Furlhenlore, the Deecl of Absohrte Sale is subject to the documentary stamp tax based on the actual consicleration Tax Code 1977, as amended. o1'the propelty sot.t pursuant to Sec. l9'6 of the of Iu 'v'iew of the tbregoing, this Oillce regrets to deny your request fbr tax exemption ibr lack oi'legal basis. Very truly yollrs, JLP'a*H*1; CAESAR R. DTILAy K-t ,rt a1?904 Commissioner of Intemal Revenue