BIR Ruling [DA-353-97]

October 30, 1997 BIR RULING [DA-353-97] The Philippine American Life Insurance Company United Nations Avenue Manila Attention: Ms . Teresita O . Salonga SVP - Finance & Administrator & Treasurer Gentlemen : This refers to your letter dated October 2, 1997 which was referred to this Office by Revenue Region No. 6, Manila, Revenue District Office No. 33, Intramuros, Malate, by way of its 1st Indorsement dated October 21, 1997 requesting, in effect, for transfer of payment of expanded withholding and documentary stamp taxes under BIR Form Nos. 1601 and 2000, respectively, effected by the buyer-payor relative to the sale between The Philippine American Life and General Insurance Company and Kalakhan, Inc. It is represented that on September 25, 1997, a Deed of Absolute Sale was entered into by The Philippine American Life and General Insurance Company (Vendor), a corporation organized and existing under and by virtue of the laws of the Philippines, and Kalakhan, Inc. (Vendee), likewise a domestic corporation, with office address at 25 th Floor, Citibank Tower, Valero cor. Villar Sts., Salcedo Village, Makati City; that the Vendor is the absolute owner of office condominium units located at the 11 th Floor of Citibank Center, Paseo de Roxas, Makati City and more particularly described as follows: CCT NO. UNIT NO. Area(Square Tax Declaration No. Meters) 24395 11-1 180.61 6441 24396 11-2 183.24 6442 24397 11-3 276.09 6443 24398 11-4 271.23 6444 24399 11-5 280.76 6445 24415 LB-26 31.37 6344 24416 LB-27 31.37 6345 24417 LB-28 31.37 6346 24418 LB-29 31.37 6347 24419 LB-30 31.37 6348 that the Vendee had agreed to buy and the Vendor had agreed to sell the aforementioned properties including the appurtenant parking slots in the total amount of P77,495,625; that the parties are now working for the transfer of the titles to the said real estate in the name of the Vendee; that pursuant to Revenue Regulations No. 12-94, implementing Section 50(b) of the Tax Code, as amended, the sale, exchange or transfer of real property whether held as capital asset or ordinary asset by the Philippine American Life and General Insurance Company is subject to the 7.5% expanded withholding tax or a total amount of P5,812,171.88 and 1.5% documentary stamp tax or a total amount of P1,162,434.38; that the aforementioned amounts were paid by the payor, Kalakhan, Inc., although the payment forms or returns filed were erroneously filled up with the name and Tax Identification Number (TIN) of that of the seller, The Philippine American Life and General Insurance Company bearing TIN 000-803-117; and that these payments were duly remitted to the authorized agent bank as certified to by Mr. Alfredo G. Enriquez, Assistant Manager of Far East Bank and Trust Company, United Nations Avenue Branch dated September 26, 1997, as follows: llcd (1) Documentary Stamp Tax P1,162,434.38 Machine Validation: 09-25-97 004-07-59 102 DM P1,162,434.38 (2) Income Tax Withheld P5,812,171.88 Machine Validation: 09-25-97 004-07-59 103 DM P5,812,171.88 In reply thereto, considering that the expanded withholding tax in the amount of P5,812,171.88 and documentary stamp tax in the amount of P1,162,434.38 relative to the sale of the aforementioned properties have already been paid and remitted to Far East Bank and Trust Company, UN Avenue Branch on September 25, 1997, although the Withholding Tax Remittance Return (BIR Form No. 1601) and Documentary Stamp Tax Declaration (BIR Form No. 2000) were erroneously filled up in the name and TIN of the Philippine American Life and General Insurance Co. (for the account of Kalakhan, Inc.), the same constitutes a substantial compliance with Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, implementing Section 50(b) of the Tax Code, as amended. In this connection, the RDO of Intramuros-Malate shall credit the aforestated amount for the account of the payor, Kalakhan, Inc., being the withholding agent-payor. Such being the case, the RDO can now issue the corresponding Certificate Authorizing Registration (CAR) or Tax Clearance Certificate (TCL) so that the said properties can now be transferred in the name of the vendee, Kalakhan, Inc. LexLib 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, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue