BIR Ruling [DA-204-96]

June 20, 1996 BIR RULING [DA-204-96] BRL Food Service Management, Inc. 40 General Capinpin St., San Antonio Village Pasig, Metro Manila Attention: Mr . Nonito Lao President Gentlemen : This refers to your letter dated January 29, 1996 stating your company, BRL FOOD SERVICE MANAGEMENT, INC. a corporation duly organized and existing under and by virtue of the laws of the Philippines is the vendor of Lot 3, Block 4 of subdivision plan (LRC) Pcs 2142 located and situated at Bagong Ilog, Pasig City and covered by Transfer Certificate of Title (TCT) No. (-492739)-6469; that the spouses Ildefonso and Vicente Abancio are the vendees of the said lot; that due to oversight your company issued the Transfer Certificate of Title (TCT) No. 1510 particularly described and identified as Lot 4, Block 4 of consolidation subdivision plan (LRC) Pcs. 2142; that on June 27, 1995, a Deed of Exchange was executed between your company and Spouses Abancio and that such agreement is intended to correct and rectify the mistake generated through oversight, in erroneously transferring title, ownership and possession of a parcel of land not envisioned in your negotiation and agreement for said purchase and sale. cd Based on the foregoing representation and documents submitted, you now request in effect exemption from the payment of the corresponding taxes due on said exchange transaction. In reply, please be informed that since the exchange transaction in question is without any monetary consideration and considering further that the execution of the deed of exchange is merely to correct a mistake, this Office is of the opinion as it hereby holds that the aforementioned exchange of realties between your company and the Spouses Espino 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. 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 deed is subject to the documentary stamp tax of P10.00 only pursuant to Section 188 of the Tax Code, as amended by Republic Act No. 7660. (BIR Rulings No. 027-93 dated January 15, 1993) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)