BIR Ruling [DA-166-02]

September 17, 2002 BIR RULING [DA-166-02] RA No. 8282, Sec. 16; 042-98/4-13-98 Ms. Corazon S. De La Paz President & CEO Social Security System East Ave., Diliman Quezon City M a d a m : This refers to your letter dated August 8, 2002 requesting for a ruling that the Social Security System (SSS for brevity) is exempt from paying the capital gains tax on your disposition of the real estate holdings acquired assets. You assert that Section 16 of Republic Act No. 8282, otherwise known as "the Social Security Act of 1987" provides that ". . . the SSS and all its assets and properties, all contributions collected and all accruals thereto and income or investment earnings therefrom, as well as all supplies, equipment, papers or documents shall be exempt from any tax, assessment, fee, charge, or customs or import duty . . ." In reply, please be informed that, in BIR Ruling No. 042-98 dated April 13, 1998, this Office ruled that: "In view thereof, the sale of SSS of a parcel of land to you shall be exempt from all kinds of taxes, including capital gains and documentary stamp taxes, pursuant to the afore-quoted Sec. 16 of R.A. 8282. However, since SSS is exempt from the documentary stamp tax imposed under Title VII of the Tax Code, as amended, you, being the other party to the taxable document who is not exempt, shall be the one directly liable to the said documentary stamp tax." Thus, following the above-mentioned Ruling, this Office reiterates that the disposition of the real estate holdings the SSS acquired is exempt from capital gains tax and documentary stamp tax. However, if the other party to the sale is not exempt, then it shall be directly liable for the payment of the said documentary stamp tax due thereon. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal & Inspection Group