BIR Ruling [DA-240-98]

June 15, 1998 BIR RULING [DA-240-98] Biyaya Corporation 3111 Nagtahan Street San Miguel, Manila Attention: Mr . Paul Y . SyCip President Gentlemen : This refers to your letter dated August 18, 1997 requesting for a ruling as to whether or not the tax incentives and privileges granted to you in BIR Ruling No. CMP-25-97 dated January 15, 1997 issued in your name, which ruling consolidated all the rulings issued to various homeowners associations but were still issued in your name on the sale of your properties in their respective favors of the CMP Program, under the provisions of Revenue Regulations No. 9-93, implementing R.A. 7279, otherwise known as the "Urban Development and Housing Act of 1992", are not affected by the provisions of Revenue Regulations No. 11-97 dated July 4, 1997, amending certain provisions of Revenue Regulations No. 9-93, or in other words, the tax incentives and privileges therein granted are still applicable to your future sale under the CMP program of the government. cdpr It is represented that you requested for a consolidated ruling from the Bureau for your tax incentives and privileges on the said transactions; that before your request for such ruling, however, the different homeowners associations concerned requested for respective rulings for the tax consequences on the sale by the corporation of its properties to the said associations, which the Bureau issued the respective rulings prayed for one ruling for each homeowners association; and that it was only then that you made a request for a ruling that consolidated the rulings previously issued and which the Bureau issued to you. In reply, please be informed that pursuant to Section 246 of the Tax Code, as amended, stating "SEC. 248. Non-Retroactivity of Rulings . Any revocation, modification, or reversal of . . . any of the rulings or circulars promulgated by the Commissioner shall not be given retroactive application if the revocation, modification, or reversal will be prejudicial to the taxpayers except in the following cases: (a) where the taxpayer deliberately misstates or omits materials facts from his return or in any document required of him by the Bureau of Internal Revenue; (b) where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which the ruling is based; or (c) where the taxpayer acted in bad faith." llcd the effectivity application of Revenue Regulations No. 11-97 amending Revenue Regulations No. 9-93, is prospective as embodied in its effectivity clause that it "shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation"; hence, the tax privileges and incentives granted to entities participating in the CMP program of the government shall not be revoked, modified, or amended before the effectivity of the amendatory regulations. Accordingly, the tax privileges and incentives granted to you under Revenue Regulations No. 9-93, as a participant of the CMP program of the government, shall not be revoked, modified, or amended by the latter regulations before its effectivity application. However, the amendments made by Revenue Regulations No. 11-97 to Revenue Regulations No. 9-93 shall apply to your future participations in the CMP program of the government. But, since the tax privileges and incentives granted in the former issuance were not revoked, amended, or repealed by Revenue Regulations No. 11-97 as embodied in the provisions therein, the said tax privileges and incentives still prevail and in force until a new law will withdraw such tax privileges and incentives. (BIR Ruling Nos. 261-93; 182-87, and 028-87) This ruling is issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different from that as represented, then this ruling shall be considered null and void. aisadc Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)