BIR Ruling [DA-052-04]

February 6, 2004 BIR RULING [DA-052-04] DA-204-2001 dtd 10/19/01 AFP Retirement and Separation Benefits System Camp General Emilio Aguinaldo Quezon City Attention: Atty. Francisco M. Paredes Senior Vice President Legal Counsel Gentlemen : This refers to your letter dated August 25, 2003, reiterating your request for a confirmatory ruling in a letter dated November 22, 2001 to the effect that the Armed Forces of the Philippines Retirement and Separation Benefits System (AFPRSBS) is exempt from VAT on the sale of its property more particularly described as Block 3 Lots 41/42, Phase ID, San Lorenzo South Subdivision (SLSS) to Mr. Ricardo Bautista. It is represented that AFPRSBS is a pension fund duly created under Presidential Decree (PD) No. 361, as amended by PD No. 1656. EcSCAD In reply, please be informed that AFPRSBS, an employee's trust under Section 60 (B) of the Tax Code of 1997, is not subject to value-added tax (VAT) prescribed under Section 106 (A) of the Tax Code of 1997 on the aforesaid sale of its properties to Mr. Ricardo Bautista since the said lots are not held primarily for sale to customers or held for lease in the ordinary course of trade or business but intended for the members of the AFPRSBS. However, it shall be subject to Documentary Stamp Tax (DST) imposed under Section 196 of the Tax Code of 1997 based on the actual consideration or fair market value determined in accordance with Section 6 (E) of the said Code, whichever is higher. 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, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service