BIR Ruling No. 458-2019

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Quezon City

BIR Ruling No. 1326-2018 Section 24 (D) (1) of the Code of 1997. as amended Nationa! AUG Z 8 Z019 0.4.5.8-2.0.19 Internal Revenue

City Mayor City of Balanga, Bataan Office of the City Mayor HON. FRANCIS ANTHONY S. GARCIA

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of the Nationa! Local'Government, through the Bagong Lipunan Sites and Services (BLISS). On March 2, 1983, the MHS spun-off the Bliss Development Corporation (BDC), as its subsidiary, to undertake the development of communities 'under the BLISS. adopted as a major component'of development strategy to include the selection and development of the depressed communities and coordination of programs and projects Order (EO) No. 5 1 7, the MHS, previously the Department of Human Settlements, was City of Balanga. and (2) from the City of Balanga to Housing Beneficiaries. on the transfers of property (1) from the Ministry of Human`Settlements (MHS) to the Documents submitted disclosed that on January 9, 1979, pursuant to Executive This refers to your letter dated October 22, 2018 requesting for tax exemption

Guaranty Corporation (HGC), formerly Home Insurance and Guaranty Corporation, to take steps for the liquefaction of its assets. Presidential Management Staff (PMS)."On May 09, 1988, then President Corazon C. agencies, corporations, programs, Aquino issued a Memorandum directing the consolidation of the BDC with the Home On February 1986 EDSA Revolution, MHS was abolished and all the remaining projects and functions were transferred to the

mentioned property. Hence, this request. reconvey the subject property to the City of Balanga for its monitoring, maintenance Reconveyance, in favor of the City of Balanga, conveying unto the latter the above- and development, as necessary to ensure that the purpose/s of the Rural Bliss Housing Project is strictly followed. Thus, on October 1 1, 2018, MHS, through its subsidiary. the BDC. represented by its successor-in-interest, the HGC, executed a Deed of the Rural Bliss Housing Project for Balanga City, Bataan. MHS deemed it proper to the name of the MHS. Said property was previously owned by the City of Balanga which was donated to the MHS as its counterpart contribution for the development of Balanga City. Bataan, under Transfer Certificate of Title (TCT) No. One of the Rural Bliss Housing Project is located at Brgy. Bagong Silang. I

Revenue Code of 1997, as amended, states that: In reply. please be informed that Section 24(D)(!) of the National Internal

"(D) Capital Gains from Sale of Real Property.

HON. FRANCIS ANTHONY S. GARCIA 0458 - 2019 AUG 2 8 2019

I I General. - The provisions 0f Section . 39(B) notvithsianding. a final tux of six percent (6%) based on the gross selling Section 6(E) of this Code, whichever is higher, is hereby imposed upon capital gains presumed to huve been realized from the sale, exchange, or determined either under Section 24 (A) or under this Subsection, at the price or current fair market value as determined in accordance with other disposition of real property located in the Philippines, classified That the tax liability, if any, on gains from sales or other dispositions of option of the taxpayer." (Emphasis supplied) as capital assets, including pacio de retro sales and other forms of conditional sales. by individuals, including estates and trusts: Provided. agencies or to governnent-owned or controlled corporations shall be real property to the government or any of its political subdivisions or

amended, does not define nor qualify the phrase "other disposition". It is clear, plain construed in its plain and simple meaning. "Disposition" means an act of disposing: Appeals had the occasion to rule that the National Internal Revenue Code of 1997, as and therefore must be applied without attempted or strained interpretation. It shall be transferring to the_care or possession of another; the parting with, alienation of, or giving up property2 In the case of Salud vs. Commissioner of Internal Revenue', the Court:of Tax

the said provision. Therefore, it shall be Subject to the capital gains tax imposed therein. Section 24 (D) (1) of the National Internal Revenue Code of 1997, as amended, unless specifically exciuded therefrom or subject to another tax treatment pursuant to different specific iaw excluding it trom the coverage of Section 24 (D) (1) of the National Internal Revenue Code of 1997, as amended. is deemed included within the purview of provisions of the National Internal Revenue Code of 1997, as amended. Thus, the transfer of TCT No. disposition" includes within its purview all kinds of dispositions of real property under Applying the above ruling of the Court, it is therefore clear that the phrase "other in favor of the City of Balanga, in the absence of a

Section 196 of the National internal Revenue Code of 1997, as amended. Section 24 (D) (1) of the National Internal"Revenue Code of 1997. as amended. is likewise subject to the documentary stamp taxes imposed in Section 188 and Moreover, the re-conveyance being a disposition of real property under

Revenue Bulletin 01-03 provides that: from the City of Balanga to the individual beneficiaries, Revenue Bulletin 01-03 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 by said Revenue Bulletin or any amendments thereto. Section 2 (t) of With regard to your request for tax exemption on the transfer of the property

construed and identified as "No-Ruling Areas": "SEC'TION 2. List of No-Ruling Areas. --- The following shall hereby be

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t) Request for rulings on issue/s or transactions based on hypothetical situations:

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: Black's Law Dictionary. 6th Edition 1 CTA EB Case No. 412 dated April 30. 2009

HON. FRANCIS ANTHONY S. GARCIA 0 458 -2019 AUG 2 8 2019

of Balanga, this Office cannot as yet issue a definitive ruling or opinion on the matter considering that the issue is based on hypothetical situation, which is considered as a "No-Ruling Area" pursuant to Section 2 (t) of Revenue Bulletin No. 01 -03. In view of the fact that the TCT of the property is not yet in the name of the City

Piease be guided accordingly.

Very truly yours.

C

Commissioner of Internal Revenue CAESAR R. DULAY

S K-I-LMAT 028238

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