BIR Ruling No. 262-2016

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OFINTERNAL REVENUE

Quezon City

RA7279

BIR Ruling No.003-16

6-22-2016 #262-2016

EDDMARI CONSTRUCTION AND TRADING 19 San Juan, San Luis, Pampanga

Gentlemen: Attention:ENGR.EDGARDO A.SAGUM General Manager

of Tax Exemption for the socialized housing project under the Yolanda Housing Project in Biliran Housing Project located at Brgy. Burabod, Biliran, Biliran pursuant to Republic Act (R.A.) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992" This refers to your letter dated May 20, 2016 requesting issuance of Certificate

Lambojo). (hercinafter rcferred to as Landowners) is the registered ownerof parcels of land covercd by threc (3 Transfer Certificates of Title (TCT located at Brgy Burabod, Biliran, Biliran, to wit: Documents submitted show that Andrea Capasio Lambojo, (married to Pedro

TCT Lot No. 2B-92-21 2B-92-22 2B-92-23 Area (sq. m.) 11,420 10,000 9.855

Total Area 31,275

all issued by the Registry of Deeds for Province of Biliran.

properties were executed by the landowner and the National Housing Authority (NHA), a government corporation organized and existing by virtue of Presidential Decree No.757,as amended The following Deeds of Absolute of Sale conveying the abovementioned

Absolute Sale February 17.2016 February 17,2016 Date of Deed of TCT 2B-92-22 Lot No. 2B-92-21 ConsiderationArea (sq. (PhP) m 11.420 10,000

February 17,2016 2B-92-23 9,855

Total Area 31,275

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The above described properties have been identified and certified for

intended for the families affected by Typhoon Yolanda and qualified for housing development into a residential project under the Yolanda Permanent Housing Program assistance under R.A.No.7279.

The NHA has issued a Notice of Award dated December 23,2015 to Eddmari Construction and Trading (TIN: 1, a single proprietorship

owned by Eduardo Aguilar Sagum,for the Procurement of Fully Developed Lots and

Brgv. Burahod. Biliran. Biliran-449 Housing Units with a contract price of Completed Housing Units under the NHA's Yolanda Housing Program located at

House and Lot Packages at Divine Grace Village, Brgy. Burabod, Biliran, Biliran was executed on May 11, 2016 between NHA and Eddmari Construction and Trading. whereby the latter is committed to deliver 449 units (House and Lot Package) for a work under this project are "survey works, earthworks, roadworks, drainage works. water systems, electrical power lines, miscellaneous works and housing construction. contract price of To give effect to the Notice of Award, a Contract for the Procurement of ; and that according to the contract, the scope of

Act (RA) No. 7279, pertinent portions of which state that: In reply, please be informed that pursuant to Sections 19 and 20 of Republic

for the issuance of transfer certificates of title. Housing Authority shall also be exempt from the payment of charge of providing housing for the underprivileged and homeless. shall be exempted from the payment of all fees and charges of any documentary stamp tax and registration fees, including fees required National Housing Authority, being the primary government agency in kind, whether local or national, such as income and realty taxes. All documents or contracts executed by and in favor of the National "Sec. 19. Incentives for the National Housing Authority. The

socialized housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector: "Sec. 20. Housing. To encourage greater private sector participation in Incentives for Private Sector Participating in Socialized

XXX XXX XXX

"(d) Exemption from the payment of the following.

042145 () (3 (2 Capital Gains Tax on raw lands used for the project; Value-added tax for the project contractor concerned:" Project-related income taxes;

XXX XXX XXX

Moreover, pertinent portions of RMC No. 42-01 dated October 5.2001. provide, viz.:

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Eddmari Construction and Trading_Brgy. Burabod, Biliran, Biliran

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A National Housing Authority (NHA) --- The NHA. being

the primary government agency in charge of providing housing for the

underprivileged and homeless citizens shall be exempted from the

pavment of the following national internal revenue taxes:

(

2 Documentary stamp tax on sales transactions executed by and in favor of the NHA in connection with socialized housing projects. Since Section 19 of R.A. 7279 exempts "all documents or contracts

buyer) that is dealing or transacting with the NHA. documentary stamp tax extends to the other party (either seller or executed by and in favor of the NHA," the exemption from

XXX XXX XXX

NHA's acquisition of raw land

exempt from thc payment of the capital gains tax. The landowner who sells his property for use in a socialized housing project is

Such being the case. the sale by the landowner to NHA of the subiect properties covered by TCT Nos. TCd is exempt from capital gains tax.(BIR Ruling No.003-2016 dated January 6, 2016)

of its socialized housing project extends to the other party (either seller or buyer) that The exemption from documentary stamp tax of NHA in connection with any

deals or transacts with the NHA. Consequently, since NHA is a party to the sale, no documentary stamp tax shall be due on such sale. Accordingly, the transfer by the landowner to NHA of the subject properties covered by TCT Nos.

196 of the Tax Code of 1997, as amended. (BIR Ruling No. 003-2016 dated January 6, 2016) and is likewise exempt from documentary stamp tax imposed under Section

R.A. 9337, the sale of real properties utilized for low-cost and socialized housing as of the subject properties covered by TCT Nos. defined by R.A. No. 7279 shall be exempt from value-added tax (VAT), thus, the sale Moreover, under Section 109 (1)(P) of the Tax Code of 1997, as amended by nd by the landowner to NHA for purposes of the Yolanda Permanent Housing Program is exempt from the imposition of VAT. (BIR Ruling No. 003-2016 dated January 6.

2016)

O4214notated by the Register of Deeds having jurisdiction over the properties. to the effect that the same is to be applied or is being applied to socialized housing project Upon application for exemption, a lien on the titles of the lands shall be

pursuant to RA 7279.

Please take note that this ruling is never intended and shall not be construed as

giving authority to the concerned Register of Deeds to effect transfer of the lands in

Page 4 of 4 Eddmari Construction and Trading_ Brgy. Burabod, Biliran, Biliran 1262-2016 5222016

by this Bureau. In this regard, this ruling shall be presented to the Revenue District Office (RDO) concerned in order for the latter to issue the Certificate Authorizing Registration (CAR) after the submission of the requirements provided under Revenue the name of the buyer without the necessary certificate of authority to register issued Memorandum Order (RMO)No.15-2003.

Transaction between NHA and Eddmari Construction and Trading

resettlement site pursuant to R.A. 7279, the income directly realized by Eddmari Construction and Trading from the land development and housing construction for 449 Housing Units with its necessary construction components in Divine Grace taxes. (BIR Ruling No. 003-2016 dated January 6, 2016) whose services are engaged by NHA to undertake construction of 449 Housing Units with its necessary construction components in Divine Grace Village, Brgy. Burabod. Biliran, Biliran and which was certified by the NHA as a socialized housing project as Village, Brgy. Burabod, Biliran, Biliran shall be exempt from project-related income Considering that Eddmari Construction and Trading is a project contractor

Eddmari Construction and Tradingmust issue non-VAT official receipts on its gross are to be used for the socialized housing project, since VAT is an indirect tax which can be passed on by the seller of the goods/services. It shall be understood that receipts from the said socialized housing project. construction with its necessary construction components for 449 Housing Units in Eddmari Construction and Trading shall be subiect to VAT, even if the said purchases Divine Grace Village, Brgy. Burabod, Biliran, Biliran by Eddmari Construction and Trading shall be exempt from VAT. However, the purchases of goods/articles by Moreover, pursuant to Section 20 (d)(3) of R.A. No. 7279, the housing

However, if upon investigation, it will be disclosed 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.

Very truly yours,

K-1-JRC Commissioner of Internal Revenue KIM S. JACINTO-HENARES JUN 1 7 2016 042145