BIR Ruling No. 003-2016

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

RA7279

BIR Ruling No. 063-14 BIR Ruling No. 171-15;

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GOLDENVILLE REALTY AND DEVELOPMENT CORPORATION 3368 Harvard Street, Pinagkaisahan Makati City

Attention : IDA ABENDANO- GUINTU President and General Manager

Gentlemen:

This refers to the letter of Felicisimo F. Lazarte, Jr., Group Manager of Northern and Central Luzon Management Office, National Housing Authority (NHA) dated July 3, 2015, requesting issuance of Certificate of Tax Exemption for socialized housing project, the "Fully Developed & Completed Housing Units" under NHA's Yolanda Permanent Housing Program located at Brgy. Tabuc/Ilaya, Panay, Capiz pursuant to Republic Act "(R.A.) No. 7279, otherwise known as the "Urban Development and Housing Act of 1 992".

Documents submitted show that the Carmela B. Jamora (hereinafter referred to as Landowner) is the registered owner of a parcel of land with an area of

356 of the cadastral survey of Panay, G.LR.O Cad. Record No. identified as Lot No. 356-B of the subdivision plan, Psd- square meters (120,280 sq.m.) , being a portion of Lot situated at Brgy. Pob. Tabuc, Panay, Capiz and covered by Transfer Certificate of Title (TCT) No. ' issued by the Registry of Deeds for Roxas, Capiz. On April 21. 2015, a Deed of Absolute Sale was executed whereby the Landowner transferred and conveyed the subject property to National Housing Authority (NHA) (TIN: at an agreed price of Pesos (P

development into a residential project under the Yolanda Permanent Housing Program The above described property has been identified and certified for

intended for the families affected by Typhoon Yolanda and qualified for housing

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Formerly: TCT No.

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Units under the NHA's Yolanda Housing Program iocated at Brgy. Tabuc/Ilaya, assistance under R. A. No. 7279. The NHA has issued Notice of Award dated December 4, 2014 to Goldenville Realty and Development Corporation (TIN: Panay, Capiz-1,000 Housing Units" with a contract price of for the "Procurement of Fully Developed Lots and Completed Housing P

NHA and Goldenville Realty and Development Corporation, whereby the latter is committed to deliver One Thousand (1,000) units (House and Lot Package) for a roadworks, drainage works, water supply works, power supply works, housing project". Developed Lots and Completed Housing Units (1,000 Units) at Panay Ville Housing Project, Brgy. Tabuc/Ilaya, Panay, Capiz was executed on April, 23, 2015 between under this project are "land development to include boundary and subdivision survey, construction and miscellaneous requirements necessary for the completion of the price of F To give effect to the Notice of Award, Contract for the Procurement of Fully ).; and that according to the contract, the scope of work

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

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

xX XXX XXX

) Exemption from the payment of the following.

() () 3 Value-added tax for the project contractor concerned: " Project-related income taxes: Capital Gains Tax;

xXX XX XXX

provide, viz.: Moreover, pertinent portions of RMC No. 42-01 dated October 5, 2001,

x XX XXX

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payment of the following national internal revenue taxes: the primary government agency in charge of providing housing for the underprivileged and homeless citizens shall be exempted from the National Housing Authority (NHA) -- The NHA, being

(

in favor of the NHA in connection with socialized housing projects. buyer) that is dealing or transacting with the NHA. Since Section 19 of R.A. 7279 exempts "all documents or contracts executed by and in favor of the NHA." the exemption from documentary stamp tax extends to the other party (either seller or Documentary stamp tax on sales transactions executed by and

XXX XXX XXX

Sate by the Landowner to NHA

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

property covered by TCT No. (BIR Ruling No. 171-2015 dated June 8, 2015) Such being the case, the sale by Carmela B. Jamora to NHA of the subject is exempt from capital gains tax.

of its socialized housing project extends to the other party (either seller or buyer) that documentary stamp tax shall be due on such sale. Accordingly, the transfer by the landowner to NHA of the subject property covered by TCT No. likewise exempt from documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended. (BIR Ruling No. deals or transacts with the NHA. Consequentiy, since NHA is a party to the sale, no The exemption from documentary stamp tax of NHA in connection with any dated June 8, 2015) are

NHA for purposes of the Yolanda Permanent Housing Program is exempt from the R.A. 9337, the sale of real properties utilized for low-cost and socialized housing as defined by R.A. No. 7279 shalli be exempt from value-added tax (VAT), thus, the sale of the subject property covered by TCT No. imposition of VAT. (BIR Ruling No. 171-2015 dated June 8, 2015) Moreover, under Section 109 (1)(P) of the Tax Code of 1997, as amended by. by the landowner to

pursuant to RA 7279. annotated 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

giving authority to the concerned Register of Deeds to effect transfer of the lands in Please take note that this ruling is never intended and shall not be construed as

2 id 3 id 4 id 037 9 7 6

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the name of the buyer without the necessary certificate of authority to register issued

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

Memorandum Order (RMO) No. 15-2003.

Transaction between Goldenville Realty and Development Corporation _and NHA

Considering that Goldenville Realty and Development Corporation is a

project contractor whose services are engaged by NHA to undertake construction of 1,000 Housing Units with its necessary construction components in Panay Ville

Housing Project, Brgy. Tabuc/Ilaya, Panay, Capiz and which was certified by the NHA as a socialized housing project as resettlement site pursuant to R.A. 7279, the income -directly realized by Goldenville Realty and Development Corporation from the land development and housing construction with its necessary construction components for 1,000 Housing Units in Panay Ville Housing Project, Brgy. Tabuc/Ilaya, Panay, Capiz shall be exempt from project-related income taxes. (BIR Ruling No. 063-14 dated February 19, 2014)

Moreover, pursuant to Section 20 (d)(3) of R.A. No. 7279, the housing construction with its necessary construction components for 1,000 Housing Units in Panay Ville Housing Project, Brgy. Tabuc/Ilaya, Panay, Capiz by Goldenvilie Realty and Development Corporation shall be exempt from VAT. However, the purchases of goods/articles by Goldenville Realty and Development Corporation shall be subject to VAT, even if the said purchases 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 Goldenville Realty and Development Corporation must issue non-VAT official receipts on its gross receipts from the said socialized housing project.

However, if upon investigation, it will be disclosed that the facts are different, then This ruling is being issued on the basis of the foregoing facts as represented.

this ruling shall be considered null and void.

Very truly yours,

Commissioner of Internal Revenue KIM S. JACINTO-HENARES

K-1-JRC 037976 JAN 0 4 2016