BIR Ruling [DA-071-01]

April 24, 2001 BIR RULING [DA-071-01] Sec. 188 Tax Code 1997 DA 122-2000 Wack-Wack Condominium Corporation Cacho-Gonzales Building, 101 Aguirre Street, Legaspi Village Makati City Attention: Ms . Ma . Teresa Winternitz Board Director Gentlemen : This refers to your letter dated December 13, 2000 requesting for exemption from the payment of withholding and documentary stamp taxes on the transfer of a certain parcel of land from the developer to the condominium corporation without consideration. It is represented that Welbilt Construction Corporation is the registered owner of a parcel of land located at the Municipality of San Felipe Neri, Province of Rizal covered by Transfer Certificate Title No. 268593; that the subject property has a total area of two thousand two hundred fifteen (2,215) square meters; that Welbilt Construction Corporation developed and constructed on the above stated property the Wack Wack Apartment Building (Condominium Project); that pursuant to the provisions of Republic Act No. 4726, otherwise known as the Condominium Act and in accordance with the Master Deed and Declaration of Restrictions, Wack Wack Condominium Corporation was organized for the purpose of owning and holding title to all the common areas in the condominium project including the land on which the said condominium is located; that the Deed of Assignment without consideration was executed between the developer, Welbilt Construction Corporation and Wack Wack Condominium Corporation for the purpose of conveying title to the land. HEcaIC In reply thereto, please be informed that since the transfer of the parcel of land to the Wack Wack Condominium Corporation is without consideration, no income will be generated therefrom, and a fortiori , no creditable withholding tax is payable and collectible. The transfer is not subject to the documentary stamp tax imposed by Section 196 of the Tax Code of 1997 since Section 185 of the Documentary Stamp Tax Regulations (Regulations No. 26), states that "conveyances of realty not in connection with a sale, to trustees or other persons without consideration are not taxable." (BIR Rulings UN-145-94 dated April 26, 1994; Un-154-94 dated May 24, 1994; and DA-362-96 dated October 3, 1996) 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, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Acting Assistant Commissioner Legal Service