BIR Ruling [DA-354-03]

October 10, 2003 BIR RULING [DA-354-03] 27 (D) (5); 27 (A); DA-172-2002 Cruise Ship Travel Center Parc House, Rm. 46 227 EDSA Greenhills, Mandaluyong City Attention: Ms. Anna Maria Cusi-Cinco Office Manager Gentlemen : This refers to your letter dated February 19, 2003 requesting in effect for exemption from the payment of the capital gains tax and documentary stamp taxes in connection with the assignment by Cruise Ship Travel Center of its right over a condominium unit (Unit No. 3135) at City & Land Mega Plaza, located at ADB Avenue corner Garnet St. Ortigas Center, Pasig City, in favor of Ms. Elizabeth Trinidad Tioseco. In reply, please be informed that assignment of rights in real property is not subject to the capital gains tax under Section 27(D)(5) or to the ordinary income tax under Section 27(A), both of the Tax Code of 1997 because in assignment of rights, the assignee merely steps into the shoes of the assignor without acquiring a better right than what the assignor had in the property to which the right assigned pertain while the title or ownership thereof still remains with the developer. However, any gain realized by the assignor from and as a consequence of such assignment is subject to income tax. The Deed of Assignment, however, is subject to the P15.00 documentary stamp tax imposed under Section 188 of the Tax Code of 1997. 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 from that as represented, then this ruling shall be considered null and void. DTCSHA Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group