BIR Ruling [DA-131-98]

March 26, 1998 BIR RULING [DA-131-98] Cityland Development Corporation 2/F & 3/F Cityland Condominium 10 Tower I 6815 H. V. Dela Costa Street Ayala Avenue, North Makati 1226 Attention: Atty . Ma . Lilia T . De Guzman Senior Legal Counsel Gentlemen : This refers to your letter dated June 30, 1997 stating that Cityland Development Corporation (Cityland) is the registered owner of four (4) parcels of land covered by TCT Nos. 169277, 169279, 169275 and 197071 located at Barangay Pio del Pilar, Dela Rosa Street, Makati City; that you developed/constructed a condominium project known as the Cityland Dela Rosa Condominium, Inc.; that in compliance with the law, you provided said condominiums with amenities/facilities, such as gymnasium, water facilities, information counter and other common areas; that said amenities/facilities are being used and enjoyed by the unit owners who are members of' the Cityland Dela Rosa Condominium Inc.; that since the facilities/amenities are being used and maintained by the members/unit owners, the condominium corporation deemed it necessary and proper and agreed to own, operate, maintain said amenities/facilities; that on June 30, 1997, you executed a Deed of Assignment covering the common areas in favor of the Condominium Corporation without monetary consideration because under the Master Deed with Declaration of Restrictions dated May 30, 1990, the aforementioned parcels of land and other common areas are considered part of the condominium project and that the transfer/assignment was effected to ensure proper maintenance/upkeep of the condominium facilities/amenities for the common benefit of the members of the association/residents. LexLib Based on the foregoing, you now request confirmation of your opinion that the assignment/conveyance is not subject to capital gains/withholding tax and documentary stamp tax imposed under then Section 196 of the Tax Code, as amended. In reply, please be informed that the aforementioned conveyance of the amenities/facilities by Cityland Development Corporation to the Condominium Corporation as the assignee, is not subject to capital gains tax and withholding tax since the conveyance of the amenities/facilities is not for a monetary consideration but merely acknowledges and confirms the title and ownership of the condominium corporation. Likewise, since there is no monetary consideration for the conveyance of the amenities/facilities, the Deed of Conveyance is not subject to the documentary stamp tax under Section 196 of the Tax Code, as amended, but only to the documentary stamp tax of P15.00 on certification under Section 188 of the Tax Code, as amended. (BIR Ruling No. 115-94 dated July 1, 1994) 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. aisadc Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal & Enforcement Group