BIR Ruling No. 321-2016

REPUBLICOF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

RA7279

BIR Ruling No. 036-2014

#321-2016

6-29-2016

J.C.UYECIO CONSTRUCTION AND DEVELOPMENT COMPANY

Balagtas,Bulacan Divine Grace

Gentlemen: Attention :JAMES C.UYECIO President/CEO

Housing Act of 1992 Resettlement Housing Project located in Brgy.Masuso, Pandi, Bulacan pursuant to Republic Act (R.A. No.7279.otherwise known as the Urban Development and This refers to your undated letter requesting tax exemption of Villa Elise

Company (TIN: Bulacan to wit by three 3 Transfer Certiticates of Title TCT located at Brgy.Masuso.Pandi Documents submitted show that J.C.Uyecio Construction and Development is the registered owner of parcels of land covered

TCT Lot No. 2616-A Tax Deciaration No. Area (sq. m.) 40,000

2612-B 6,000 2612- 31.655

Total Area 77,655

all issued by the Registry of Deeds for Province of Bulacan, Meycauayan Branch.

Uyecio Construction and Development Company and Villa Elise Homeowners Land Use Regulatory Board (HLURB. whereby former has offered to sell the developed lots and completed housing units under the Community Initiative Approach Program (CIAP of the National Housing Authority (NHAfor per family. Association Inc., a homeowner's organization registered with theHousing and On March 24.2014.a Contract Agreement was executed by and between J.C for every developed lot and completed housing unit

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FormerlyTCT No. FormerlyTCT No. ormerlvTCT No for developed lot and for completed housing units

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were executed by and among,J.C.Uyecio Construction and Development Company as the landowner/developer/contractor, Villa Elise Homeowners Association Inc.. as Moreover,on September 3.2014,a Memorandum of AgrecmentMOA

the beneficiary and the NHA, as the lead agency in the implementation of the National Resettlement Programs of the government and to ensure the timely.peaceful

and orderly relocation and resettlement of the informal settler families along danger

areas affected by the clearing of waterways and esteros in Bulacan Province.

Under the MOA,members of Villa Elise Homeowners Association Inc. shall be provided by the NHA with a financial grant for the acquisition of One Thousand

Three Hundred Twenty One (1.321 developed lots and financing the acauisition of 1.31 loftable row-house nnits in the amount not to exceed Pesos per lot and Pesos per completed housing unit.

transferred and conveyed 1.321 developed lots under Batch 1 and 2-2014 with an Company and the NHA executed a Deed of Absolute Sale whereby the former aggregate area of Seventy Seven Thousand Six Hundred Fiftv Five sauare meters (77.655 sq.m.) of the subiect properties covered by TCT Nos. On November 17. 2014, J.C. Uyecio Construction and Development and o NHA at an agreed price of Pesos :

In reply,please be informed that pursuant to Sections 19 and 20 of Republic Act(RANo.7279.pertinent portions of which state that

"Sec.19. Incentives for the National Housing Authority.- The

charge of providing housing for the underprivileged and homeless. National Housing Authority, being the primary government agency in

kind. whether local or national, such as income and realty taxes.All shall be exempted from the puyment of all fees and charges of any

for the issuance of transfer certificates of title. documents or contracts executed by and in favor of the Nationul documentary stamp tax and registration fees. including fees required Housing Authority shall also be exempt from the puyment of

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

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(d) Exemption from the payment of the following.

Project-related income taxes:

(2) Capital Gains Tax on raw lands used for the project

For financing the acquisition of developed lots and financing the acquisition of completed housing unitsVilla Elise Resettlement Project.Brgy.Masuso.Pandi,Bulacan See Annex list of beneficiaries consisting of twenty four24 pages Composed of members/families living in danger areas affected by the clearing of waterwaysesteros within Bulacan Province

ACR?

J.C.Uvecio Construction and Development CompanyVilla Elise Resettlement Housing Project Page 3 of 4 6-29-2016 #321-2016

(3)Value-added tax for the project contractor concerned"

the landowner/developer of properties who sell its properties for use in a socialized housing project are exempt from the payment of the capital gains tax and project- related income taxes.

Company to NHA is exempt from capital gains tax,project-related income taxes and and 2-2014 on subject properties_covered by TCT Nos. consequently from withholding tax.(BIR Ruling No.036-2014 dated January 29 2014} Such bcing the case,the sale of 1,321 developed lot packages under Batch 1 by J.C.Uyecio Construction and Development

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

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

(

buver) that is dealing or transacting with the NHA. in fuvor of the NHA in connection with socialized housing projects. 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 2)Documentary stamp tax on sales iransactions executed by and

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2-2014 on_subject pronerties covered by TCT Nos. documentary stamp tax shall be due on such sale. either on NHA or the party with Development Company to NHA of-1321 developed lot packages under Batch and imposed under Section 196 of the Tax Code of 1997.as amended.BIR Ruling No. 036-2014 dated January 29.2014 of its socialized housing project extends to the other party(either seller or buyer that deals or transacts with the NHA.Consequently,since NHA is a party to the sale.no which NHA is transacting.Accordingly.the transfer of J.C.Uyecio Construction and The exemption from documentary stamp tax of NHA in connection with any and are likewise exempt from aocumentary stamp tax

that the same is to be applied or is being applied to socialized housing project annotated by the Register of Deeds having jurisdiction over the property.to the effect pursuant to RA 7279. Upon application for exemption a lien on the title of the land shall be

Registration (CAR) after the submission of the requirements provided under RMO 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 giving authority to the concerned Register of Deeds to effect transfer of the land in the name of the buver without the necessary certificate of authority to register issued by 15-2003. Please take note that this ruling is never intended and shall not be construed as

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J.C.Uyecio Construction and Development CompanyVilla Elisce Resettlement Housing Project Page 4 of 4

Construction and Development Company of L321 developed lot packages under Batch I and 2-2014 on subiect properties covered by TCT Nos. Pursuant to Section 20 (d3 of RA 7279, the transfer/sale by J.C.Uyecio in favor of NHA shall be exempt from VAI

However.its purcuases or goods/arucles 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. Moreover, it shall be understood that J.C.Uyecio Construction and Development Company must issue non-VAT official receipts on its gross receipts from the said socialized housing

project.

This ruling is being issued on the basis of the foregoing facts as represented

However, if upon investigation. it will be disclosed that the facts are different, then

this ruling shall be considered null and void.

Very truly yours.

KIM S.JACINTO-HENARES

Commissioner of Internal Revenue K-1-JRC 042582

JUN 2 9 2016