BIR Ruling [DA-176-01]

September 28, 2001 BIR RULING [DA-176-01] R.A. 4726; 27; 57 (b); 188 DA-117-2001 A & T Condominium Corporation 244 Escolta Street, Manila Attention: Mr. Manuel A. Tomas President Gentlemen : This refers to your letter dated October 26, 2000 requesting for exemption from the payment of transfer of tax, documentary stamp tax and other taxes relative to the conveyance of the common areas of A & T Incorporated in favor of A & T Condominium Corporation. It is represented that A&T Incorporated is the registered owner of a parcel of land including an 8-Storey condominium building built thereon known as the A&T Condominium, located at 244 Escolta, Binondo, Manila covered by Transfer Certificate of Title No. 50450; that the subject property has a total area of Five Hundred Sixty square meters and Eighty square decimeters (560.80) sq. m.; that pursuant to the provisions of Republic Act No. 4726, otherwise known as the Condominium Act and in accordance with the Master Deed and Declaration of Restrictions, A&T Condominium Corporation was organized for the purpose of managing, holding title to, and maintaining all the common areas in the condominium building including the land on which said condominium is located; and that a Deed of Conveyance without consideration was executed between A&T Incorporated and A&T Condominium Corporation for the purpose of conveying title to the land. In reply, please be informed that since the Deed of Conveyance above-mentioned was made without any monetary consideration and is not in connection with a sale made to the condominium corporation, no taxable income will be generated and a fortiori, no creditable withholding tax is payable and collectible. The purpose of the conveyance to the condominium corporation is for the management of the project for the common benefit of the unit-owners, pursuant to Section 10 of R.A. 4726, otherwise known as the Condominium Act. In view thereof, this Office is of the opinion as it hereby holds that the aforesaid Deed of Conveyance transferring the common areas of the condominium project to A&T Condominium Corporation is not subject to the creditable withholding tax under Section 57(B) in relation to section 27 of the Tax Code of 1997, Neither is it subject to the documentary stamp tax imposed under Section 196 of the same Code.However, the notarial acknowledgment to said deed of conveyance is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-117-2001 dated June 29, 2001) 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Acting Assistant Commissioner Legal Service