BIR Ruling [DA-095-98]

March 19, 1998 BIR RULING [DA-095-98] SP Properties, Inc. P. O. Box 1932 Manila Attention: Atty . Benjamin E . Mendoza Legal Counsel Gentlemen : This refers to your letter dated February 23, 1998 requesting for exemption from capital gains, documentary stamp and transfer taxes and registration fees on the transfer of converted agricultural land pursuant to Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Program Law. casia It is represented that Eighty One (81) parcels of agricultural land located at Brgy. Maguyam, Silang, Cavite were ordered converted into industrial land per DARCO No. 040218022-1061, series of 1998; and that the respective owners of the said parcels of land have transferred their share to S. P. Properties, Inc. In reply, please be informed that Section 66 of R. A No. 6657 provides, viz: "SEC. 66. Exemption from Taxes and Fees of Land Transfers . Transactions under this Act [RA 6657] involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from capital gains. These transactions shall also be exempted from the payment of registration fees, and all other taxes and fees for the conveyance or transfer thereof; Provided, that all arrearages in real property taxes, without penalty or interest, shall be deductible from the compensation to which the owner may be entitled." the transactions involving transfer of ownership is exempt from capital gains tax and also from "other taxes". Said phrase "other taxes" includes documentary stamp tax imposed under Section 196 of the Tax Code of 1997 because documentary stamp tax is substantially a tax on the transaction rather than on the document (Op. No. 177, S. of 1939, Secretary of Justice). However, transfer tax and registration fees are not the concern of this Office but that of the Department of Local Government. (BIR Ruling No. 104-90 dated May 29, 1990) This ruling is being issued on the basis on 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.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)