BIR Ruling [DA-325-99]

May 27, 1999 BIR RULING [DA-325-99] Petronas Energy Philippines, Inc. Dalipuga, Iligan City Attention: Mr. Carlos P. Corpuz Financial Controller Gentlemen : This refers to your letter dated May 27, 1998 which was referred to this Office for clarification as to whether the payments by Petronas Energy Philippines, Inc. (PEPI) of the documentary stamp tax assessed against Duta, Inc. (DI) on the Deed of Absolute Sale dated July 21, 1997 executed by and between DI and Concepcion D. Borja, but was mistakenly made in the name of PEPI could be considered valid for purposes of the issuance of the corresponding Certificate Authorizing Registration. It is represented that documentary stamp tax due on the aforementioned Deed of Absolute Sale was assessed by the Revenue District Office No. 101, Iligan City in the amount of P422,040.00; that the said assessed documentary stamp tax was paid by PEPI on July 2, 1997 for and in behalf of DI, its sister company; that although the documentary stamp tax was paid by PEPI, such payment was not intended to be in the name of PEPI and was actually due to an error on the part of PEPI personnel; that DI is a real property company which owns the property utilized by PEPI for its liquefied petroleum gas bottling plants in Iligan City and Davao City; that considering the limited transactions of DI, it has no full time employees and relies on the personnel of PEPI for its accounting requirements; that when instructions were issued for the payment of the documentary stamp tax, payment was mistakenly made in the name of PEPI instead of DI; that PEPI has billed DI for the payment of the documentary stamp tax and appropriate adjustments in the financial records of both companies have likewise been made, and that you believe that the error to reflect the correct party paying the documentary stamp taxes did not prejudice the Philippine Government for the reason that the appropriate amount of taxes was paid on the due date thereof. In reply, please be informed that the payment made by PEPI of the documentary stamp tax assessed by Revenue District Office No. 101, Iligan City, on the Deed of Absolute Sale executed by and between DI and Concepcion V. Borja which was mistakenly made in the name of PEPI instead of DI but which PEPI subsequently billed against DI and appropriate adjustments in the financial records of both companies have been made, is a valid payment of the documentary stamp tax due on said sale transaction considering that Section 173 of the Tax Code of 1997, merely provides those who are directly liable to pay the tax but does not exclude others from making such payment for those directly liable thereto. Thus, PEPI's payment on behalf of DI is a valid payment of the documentary stamp tax due on said sale transaction. EHaCTA After the necessary corrections have been made as to the name of the payor, the Revenue District Office concerned may now issue the corresponding Certificate Authorizing Registration in favor of Duta, Incorporated. 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.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)