BIR Ruling [DA-181-97]

April 16, 1997 BIR RULING [DA-181-97] Atty. Aurora A. Santiago 83 San Marcos Street Navotas, Metro Manila M a d a m : This refers to your letter dated September 18, 1996 stating that you purchased one (1) condominium unit and parking lot from KSY Land Development Corporation (KSY), a corporation duly organized and existing under the laws of the Philippines with principal office at 18/F Pacific Star Building, Makati Avenue corner Sen. Gil J. Puyat Avenue, Makati City; that the condominium unit and parking lot is one of those located at Alpha Salcedo Condominium, H.V. dela Costa Street, Salcedo Village, Makati City; that a Deed of Absolute Sale was executed between you and KSY and the corresponding titles to the condominium unit and parking lot were issued under your name; that when the condominium unit and parking lot was turned over to you last July 1996, you noted that the parking lot sold to you is different from what you intended to purchase, that is, you purchased the parking lot located at Basement 1 (B1P03) and not the one located at Basement 2 (B2P21); that it was only then when KSY discovered the error committed in the typing of the description of the parking lot when the Deed of Absolute Sale was prepared inasmuch as the parking lot which should have been stated thereon is B1P-03 (which is located at Basement 1) instead of B2P-21 (which is located in Basement 2), both parking lots being located in Alpha Salcedo Condominium; that as a result of the foregoing, you demanded that the corresponding title be changed to cover the corrected parking lot; and that no new purchase of parking lot is involved. Based on the foregoing representation and document submitted, you now request in effect exemption from the payment of the corresponding taxes due on the rectification. In reply, please be informed that since the Affidavit of Alberto L. Yu, President of KSY attesting to the error committed is without any monetary consideration, and considering further that the execution of the said document is merely to correct a mistake, this Office is of the opinion as it hereby holds that the aforementioned transaction is not subject to the capital gains tax, imposed under Section 21 (e) of the Tax Code nor to the creditable withholding tax imposed under Revenue Regulations No. 1-90. ETISAc Furthermore, it is not likewise subject to the documentary stamp tax imposed under Section 196 of the Tax Code. However, the notarial acknowledgment to the said document is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the Tax Code, as amended by Republic Act No. 7660. (BIR Ruling No. 027-93 dated January 15, 1993) 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. aCHcIE Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: (SGD.) ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)