BIR Ruling [DA-226-97]

June 23, 1997 BIR RULING [DA-226-97] Castillo Laman Tan Pantaleon & San Jose Law Offices The Valero Tower 122 Valero St., Salcedo Village 1227 Makati City Attention: Ms . Eva Policar-Bautista and Ms . Yolanda M . Eleazar Gentlemen : This refers to BIR Ruling No. DA-205-96 dated June 20, 1996 where this Office held that xxx xxx xxx "In reply thereto, please be informed that all sales, exchanges or transfers of real properties whether held as capital or ordinary asset by corporations are subject to the creditable withholding tax. (Revenue Regulations No. 1-90 as amended by Revenue Regulations No. 12-94) Accordingly, if as represented, the partners of the Law Firm Castillo Laman Tan Pantaleon & San Jose namely: Noel A. Laman, Ancheta K. Tan, Polo S. Pantaleon, Felipe T. Cuison, Roberto V. San Jose, Eva Policar-Bautista, Paulino N. Dio, Mel A. Macaraig, Ma. Victoria D. Sarmiento and Ramon S. Esguerra are the real owners of the aforementioned condominium units in the Valero Tower Condominium which are covered by the following Condominium Certificates of Title issued by the Register of Deeds for Makati City. aisadc xxx xxx xxx no corporate income tax accrued and became collectible under the creditable expanded withholding tax provisions of Revenue Regulations No. 1-90 as amended by Revenue Regulations No. 12-94, on account of the Deed of Transfer which pertains only to the transfer of the condominium units from the trustee Law Firm to the real owners/partners of said Law Firm. Moreover, since as represented, the Deed of Transfer of said Condominium Units executed by the Law Firm in favor of the partners has no consideration because the latter are the real owners of said property and the former acted only as trustee, it is subject only to the documentary stamp tax on certificates imposed under Section 188 of the Tax Code, as amended and not to the documentary stamp tax on deed of sale and conveyance of real property imposed by Section 196 of the same Code. Moreover, considering that there is no donative intent when the Law Firm through its Executive Committee executed the Deed of Transfer of the said Condominium Units in favor of the partners, it is not therefore subject to the donor's tax. (BIR Ruling No. 118-87 dated April 24 1987. 116-91 dated June 21, 1991)" In your letter dated December 5, 1996, you stated that this Office omitted the name of a partner, Atty. Yolanda M. Eleazar and made a typographical error in the enumeration of the names of the partners and that as stated in "Annex B" of your letter request dated April 1, 1996 pursuant to which the aforementioned ruling was issued the names of your partners are as follows: Noel A. Laman, Ancheta K. Tan, Polo S. Pantaleon, Roberto V. San Jose, Felipe T. Cuison, Eva Policar Bautista, Paulino C. Petralba, Yolanda M. Eleazar, Roberto N. Dio, Mel A. Macaraig, Ma. Victoria D. Sarmiento and Ramon S. Esguerra. In reply thereto, please be informed that paragraph 3 of BIR Ruling No. DA 205-96 dated June 20, 1996 is hereby modified to read as follows: "In reply thereto, please be informed that all sales, exchanges or transfers of real properties whether held as capital or ordinary asset by corporations are subject to the creditable withholding tax. (Revenue Regulations No. 1-90 as amended by Revenue Regulations No. 12-94) Accordingly, if as represented, the partners of the Law Firm Castillo Laman Tan Pantaleon & San Jose namely: Noel A. Laman, Ancheta K. Tan, Polo S. Pantaleon, Felipe T. Cuison, Roberto V. San Jose, Eva Policar-Bautista, Paulino C. Petralba, Yolanda M. Eleazar, Roberto N. Dio, Mel A. Macaraig, Ma. Victoria D. Sarmiento and Ramon S. Esguerra are the real owners of the aforementioned condominium units in the Valero Tower Condominium which are covered by the following Condominium Certificates of Title issued by the Register of Deeds for Makati City: . . ." Very truly yours, SIXTO S. ESQUIVIAS IV OIC, Assistant Commissioner (Legal Service)