BIR Ruling No. 303-2020

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

RA No. 7279

BIR Ruling No.034-15 CMP-0303-2020 JUN 0 8 2020

Sitio 6, Catmon, Malabon City 1470 SAMAHANG MARALITA CATMON HOMEOWNERS ASSOCIATION,INC.

Attention:DENNIS B.MASTELERO SMC HOAPresident

Gentlemen:

beneficiary pursuant to Republic Act No. 7279'otherwise known as the "Urban Development gains tax (CGT), relative to the transfer of title of land from SAMAHANG MARALITA and Housing Act of 1992" CATMON HOMEOWNERS ASSOCIATION, INC., in favor of its qualified member- This refers to your letter dated. June 14, 2019, requesting exemption from capital

non-profit organization duly registered with. :the Housing and Land Regulatory Board acquired through a loan under the Community Mortgage Program (CMP) with Foundation registered owner of the parcel of land located;at Lot 1, BIk. 5, SMC Homeowners, Sitio 6, Gov. Pascual Ave., Catmon, Malabon City and covered by Transfer Certificate of Title (HLURB) under the Certificate of Registration No. For Alternatives, Inc., as Originator; that said project was taken-out/paid on November 23. (TCT) No. ASSOCIATION,INC.,withTaxpayer's Identification No. 2004 in the amount of Pesos (P It is represented that SAMAHANG MARALITA CATMON HOMEOWNERS issued by the Registry of Deeds of Malabon City; that it is a non-stock. ), involving One Hundred Fifty|Four (154) beneficiaries; that on July .; that the aforesaid lot was is the

CATMON HOMEOWNERS ASSOCIATION, INC. in favor of its member-beneficiary, 22, 2019, a Deed of Absolute Sale was executed by SAMAHANG MARALITA to wit:

Member-Beneficiaries TCT No. Lot Area (sq. m.) Address

LORNA B. SALADAGA 23.50 Sitio 6, Gov. Pascual Ave., Catmon, Lot 1, Blk. 5, SMC Homeowners. Malabon City

and that Lorna B. Saladaga, a member-beneficiary, is now in the process of transferring the purchased property to her name.

amended, or the creditable withholding tax imposed under Revenue Regulations No. 2-98, member-beneficiary who has made full payment of|her purchased subdivided lot is not subject to either the CGT imposed under Section 27(D) (5) of the Tax Code of 1997, as CATMON HOMEOWNERS ASSOCIATION, INC. in favor of the above-named In reply, please be informed that the transfer by SAMAHANG MARALITA

CMP -0303-2020

JUN 0 8 2020

SAMAHANG MARALITA CATMON HOMEOWNERS ASSOCIATION, INC. Page 2 of 2

as amended, considering that the said transfer of property is made only as a formality to finally effect the transfer of the said property to its member-beneficiary, Lorna B. Saladaga, who actually bought the same from the former owner through the Association. In other words, the association is merely transferring the ownership of the property to its member- beneficiary who actually owns the aforedescribed lot.

Section 98 of the Tax Code of 1997, as amended, since there is no donative intent on the part of the Association to donate the said property to said member-beneficiary, considering that it could not donate property the ownership of which already belongs to the member- beneficiary. (BIR Ruling No. 034-2015 dated Februdry 5, 2015) Furthermore, the said transfer is not subject to the donor's tax imposed under

documents subject to the documentary stamp tax (DST) imposed therein are those where the realty sold shall be granted, assigned, transferred, or otherwise conveyed to a purchaser or purchasers or to any other person or persons designated by such purchaser or purchasers, thereby excluding from its purview the instant case considering that the supposed purchaser is actually the owner thereof. It is noted that under Section 196 of the Tax Code of 1997, as amended, the deeds or

However, the notarial acknowledgment to the Deed of Sale is subject to the documentary stamp tax of P30.00' pursuant to. Section 188 of|the Tax Code of 1997. (BIR Ruling No. 034-2015 dated February 5, 2015) beneficiary is not subject to DST under Section 196 of the Tax Code of 1997, as amended. Accordingly, the transfer of title of the subject lot in favor of the above-named

after it is established upon proper verification by the Revenue District Officer (RDO) concerned that, considering the rules on valuation on real property, the actual selling price only be issued after the submission:of the requirements provided under RMO 15-2003 and per sale transaction in this case does not exceed P450,000.00 for house and lot and P180,000.00 for lot only for each qualified beneficiaries. (BIR Ruling No. 034-2015 dated February 5, 2015) It is, however, understood that the Certificate Authorizing Registration (CAR) shall

However, if upon investigation, it will be. disclosedthat 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,

naesamue

CAESAR R. DULAY Commissioner of Internal Revenue

K-1-JAC 035099

The new DST rate is used since the transaction took place afterthe effectivity of Republic Act No.10963 or TRAIN Law.