BIR Ruling [DA-011-00]

January 5, 2000 BIR RULING [DA-011-00] Mr . Maximo A . Delos Reyes National Power Corporation Mindoro Operations Department SPUG S i r : This refers to your letter dated March 12, 1999 stating that your wife is a bid winner for the purchase of lot situated at Libis, Calapan, Oriental Mindoro, covered by TCT No. 66744 issued by the Registry of Deeds for the Province of Oriental Mindoro; that the said lot is owned by the Social Security System (SSS); and that transfer of the title to her name requires clearance from the BIR. Based on the foregoing, you now request for exemption from the payment of capital gains tax on the sale of a parcel of land by the SSS to your wife. In reply, please be informed that Section 16 of Republic Act No. 8282 states that: "Sec. 16. Exemption from Tax, Legal Process and Lien . All laws to the contrary notwithstanding, the SSS and all its assets and properties, all contributions collected and all accruals thereto and income or investment earnings therefrom, as well as all supplies, equipment, papers or documents shall be exempt from any tax, assessment fee, charge, or customs or import duty and all benefit payments made by the SSS shall likewise be exempt from all kinds of taxes, fees or charges and shall not be liable to attachments, garnishments, levy or seizure by or under any legal or equitable process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the member to the SSS. No tax measure of whatever nature enacted shall apply to the SSS, unless it expressly revokes the declared policy of the State in Section 2 hereof granting tax-exemption to the SSS. Any tax assessment imposed against the SSS shall be null and void." (Emphasis supplied) In view thereof, the sale of the SSS of a parcel of land to your wife shall be exempt from all kinds of taxes, including capital gains and documentary stamp tax pursuant to the aforequoted provision of R A. 8282. However, since SSS is exempt from documentary stamp tax imposed under Section 196 of the Tax Code of 1997, your wife being the other party to the taxable document who is not exempt, shall be the one directly liable to the said documentary stamp tax based on the gross selling price or the fair market value of the property, whichever is higher (BIR Ruling No. 42-98 dated April 13, 1998) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it shall be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group