BIR Ruling [DA-145-98]

April 17, 1998 BIR RULING [DA-145-98] City & Land Developers, Inc. 2nd/3rd Floor, Cityland Condominium 10 Tower 1 6815 Ayala Avenue, Makati City Attention: Atty . Emma G . Jularbal AVP-Legal Gentlemen : This refers to your letter dated January 28, 1997 requesting that the conveyance of the common areas of your subdivision project be exempted from the payment of creditable withholding and documentary stamp taxes. LexLib It appears that the City & Land Developers, Inc. (CLDI) is the owner/developer of a residential subdivision known as Sunvalley Parkview Homes Subdivision Phases I to IV located at Barangay Sunvalley, Paraaque, Metro Manila; that CLDI is the absolute and registered owner of three (3) parcels of land embraced and covered by Transfer Certificate of Title Nos. 67625, 67626 and 65861 issued by the Registry of Deeds of Paraaque, Metro Manila and wherein the water facilities consisting of the pumping equipment, elevated tank, and the transmission/distribution lines are located; that the Sunvalley Parkview Homes Homeowners' Association, Inc. (hereinafter referred to as the Association) is likewise the grantee of a Certificate of Public Convenience No. 02-1094, as well s Water Permit Nos. 12919 and 12920 both dated October 28, 1991, authorizing the operation of said waterworks facilities to service the water requirements of the lot owners of the subdivision project who are all members of the Association; that since the waterworks facilities are being used by the members of the Association, CLDI deemed it necessary and proper for the Association to own, operate and maintain said waterworks facilities; that on August 1, 1996, CLDI executed a Deed of Assignment covering the water facilities without monetary consideration; and that the aforementioned Deed of Assignment 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. In reply, please be informed that the conveyance of the amenities/facilities by CLDI to the Association is not subject to capital gains and withholding taxes since the conveyance of the amenities/facilities is not for a monetary consideration. Likewise, since there is no monetary consideration for the conveyance of the amenities/facilities, the Deed of Assignment 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. LLcd Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)