BIR Ruling No. 316-2016

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

Section 20.RA 7279

BIR Ruling No.063-2014

#316-2016 6-28~2016

Quezon City Phintecstar Construction, Inc. Suites 21&24 3J Heights Bldg. No.35 Visayas Avenue,Diliman

Attention: Mr. Zoilo Joaquin C. Amador President

Gentlemen:

-Urban Development and Housing Act of 1992" Tacloban City.pursuant to Republic Act (RA) No.7279, otherwise known as the Manager, Visayas Management Office, of the National Housing Authority (NHA requesting for a certificate of exemption on the Land Development of Kawayan Ville 3 formerly.Tacloban North Resettlement Project,Phase 3,located at Brgy.Kawayan. This refers to the letter dated May 12,2014 of Lorna M.Seraspe, Group

Socialized housing project of the NHA that will be implemented under the Emergency completed.the project will generate a total of Five Hundred Forty Two 542 serviced home lots with a modal lot size of 40 square meters. Land Development of Kawayan Ville 3 located at Brgy.Kawayan,Tacloban City,is a Housing Assistance for Calamity Victims Program of the Government, particularly to address the permanent housing requirement of the victims of typhoon Yolanda at the no build zoneof Tacloban City. The site which will be developed is owned by the City Government of Tacloban and has a total land area of 100.984 square meters.of which.42,910 square meters will cover the proposed land development project.When Based on the NHA Memorandum dated February 4,2014,it is shown that the

registered with the Securities and Exchange Commission (SEC) with SEC Certificate Phintecstar Construction, Inc. (TIN: 2014 was issued to Phintecstar Construction,Inc.to undertake the contract works for the Land Development of Kawayan Ville 3 Project. in the amount of 2014.the Land Development of Kawayan Ville 3 Project has been awarded to of Registration No. It is further shown that per NHA Board Resolution No. 5738 dated February 24, Consequentlya Notice of Award dated March 10 a domestic corporation duly

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.Based on the Contract for Kawayan Ville 3 Project dated May 8.2014, the scope of works for the said project are Earthworks, Road Works. Drainage Works. Water System, Survey Works and Miscellaneous Works.

In replyplease be informed that pertinent portion of Section 20 of RA No.7279 reads:

"Sec. 20. IncentivesforPrivateSector

greater private sector participation in socialized housing Participating in Socialized Housing. - To encourage

and further reduce the cost of housing units for the benefit of

shall be extended to the private sector. the umderprivileged and homeless, the following incentives

XXX XXX XX

(d) Exemption from the payment of the following:

( Project-related income taxes;

X.XX XX XXX

(3) Value-added tax for the project contractor

concerned:"

X XXX XXX

Section 3 r of R.A.7279 defines socialized housing" as follows:

"(r) "Socialized housing"refers to housing programs and

projects covering houses and lots or homelots only undertaken by the Government or the private sector for the underprivileged and homeless citizens which shall include sites and services

development,long-termfinancing.liberalized terms on interest pavments,and such other benefits in accordance with the provisions of this Act" (Underscoring supplied)

program must cover houses and lots or homelots for the benefit of the underprivileged and honeless citizens. A purely land development project without the construction of It is to be noted that in order for the above tax exemption to apply the housing

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houses and lots or development of homelots cannot avail of the tax exemption since it is just a component of the main socialized housing project, without which, the project cannot be categorized as a socialized housing under Section 3 of R.A. 7279.

In view thereof.your request for tax exemption cannot be granted for lack of legal basis.

V cry truly yours

KIM S.JACINTO-HENARES Commissioner of Internal Revenue

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K-I-JHB JU 21 2016