BIR Ruling [DA-017-01]

February 12, 2001 BIR RULING [DA-017-01] 204 & 230 DA-303-2000 Vicente E . Reyes and Associates 22 Tirad Pass, Quezon City P.O. Box 2939 Attention: Ms . Amby R . Reyes Gentlemen : This refers to your letter dated August 29, 2000 inquiring in behalf of your client, TRINITY FRANCHISING & MANAGEMENT CORPORATION (TFMC) whether or not it can transfer its Tax Credit Certificates (TCC) No. 000908 in the amount of P92,270.13 to its parent company, MERCURY GROUP OF COMPANIES, INC. (MGCI). In reply, please be informed that this Office has ruled that a TCC validly issued pursuant to the Tax Code of 1997, can be transferred or assigned by the owner, provided of course, that the TCC sought to be transferred, must not have expired and remains valid in the hands of the original holder pursuant to the provisions of Section 230 of the Code. (BIR Ruling No. 192-99). Moreover, please likewise be informed that in order to be valid, the transfer of TFMC's TCC to MGCI, must be made in accordance with the conditions and procedures regarding the transferability of TCCs set forth in Revenue Regulations No. 5-2000, issued on July 19, 2000, which reads: "SEC. 4. ASSIGNMENT OR TRANSFER . a) Transferability of TCC . Taxpayers with TCCs issued by the BIR in their name hold the same in the concept of an owner. Consequently, BIR-issued TCCs may be transferred in favor of an assignee subject to the following conditions and procedures: 1.) The TCC sought to be assigned or transferred shall be presented before the Commissioner through the Chief, Collection Programs Division for verification. If found to be valid and still with creditable balance, the TCC shall be marked "Valid for Transfer," and signed by the Assistant Commissioner, Collection Service; 2.) Upon execution of the Deed of Assignment, the transferor shall present the same, together with the original copy of the TCC to the Chief, Collection Programs Division; TAacIE 3.) The original copy of the TCC shall still be cancelled even if only a portion of its face value is transferred or assigned, in which case, a new TCC(s) shall be issued representing the respective portions pertaining to the transferee(s) and/or the balance remaining for the account of the transferor. The new TCC(s) shall be signed by the Commissioner; 4.) Any TCC issued in favor of the transferee or assignee shall be valid for five (5) years, but subject to the following conditions which must be annotated therein, as follows: 1. Not valid for further transfer; 2. Not valid for cash conversion. Accordingly, your client may transfer its TCC in accordance with the conditions and procedures as above-stated. Very truly yours, Commissioner of Internal Revenue (SGD.) LILIAN B. HEFTI Deputy Commissioner (Legal & Inspection Group) OIC-Commissioner of Internal Revenue