BIR Ruling [DA-135-98]

April 7, 1998 BIR RULING [DA-135-98] Tierra Nueva Lot-Owners Association, Inc. Corregidor Street, Tierra Nueva Village Alabang, Muntinlupa City Attention: Mr. Arturo S. Santos President Gentlemen : This refers to your letter dated January 6, 1998 requesting a ruling to the effect that the conveyance of the common areas of your subdivision project be exempted from the payment of creditable withholding tax and documentary stamp tax. It appears that the Tierra Nueva Realty Corporation (TNRC) is the owner/developer of a residential subdivision known as Tierra Nueva Village located along Zapote-Alabang Road, Alabang, Muntinlupa City; that TNRC is the absolute and registered owner of three (3) parcels of land embraced and covered by Transfer Certificates of Title Nos. S-100253, S-100254 and S-100255 wherein the Community Center, Park and Church Site are located; that as soon as the developer had fully sold the subdivision lots of the village, the developer turned over to the Tierra Nueva Lot-Owners Association, Inc. (the Association) the security, electricity, water, streets and all the amenities of the village, together with the responsibilities and expenses of maintaining the same, including the above-mentioned three (3) parcels of land; that the turn-over of these lots to the Association is evidenced by a Deed of Transfer executed by Tierra Nueva Realty Corporation; and that the aforementioned Deed of Transfer was executed solely for the purpose of proper maintenance and upkeep of the subdivision facilities/amenities for the common benefit of the members of the association/subdivision residents, and without any monetary consideration. In reply, please be informed that the conveyance of the said three (3) parcels of land by TNRC to the Association is not subject to capital gains tax and withholding tax, since the conveyance is not for a monetary consideration. Likewise, the Deed of Transfer is not subject to the documentary stamp tax under Section 196 of the Tax Code of 1997, but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same Code. (BIR Ruling No. 115-94 dated July 1, 1994) DHEACI This ruling is issued on the basis of the foregoing representations. However, if upon investigation, it will be disclosed that the facts are different from that as represented, then this ruling shall be considered null and void. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)