BIR Ruling [DA-372-98]

August 17, 1998 BIR RULING [DA-372-98] Calalang, Law Office 1045 Ibarra Street Sampaloc, Manila Attention: Atty . Ciriaco S . Calalang Gentlemen : This refers to your letter dated October 7, 1997 requesting for a ruling on the transfer/conveyance, thru a Deed of Assignment of a land by a developer/owner to a condominium corporation for the purpose of the management of the project and common areas for the common benefit of the unit owners. cdt It is represented that on October 4, 1989, San Mateo Heights Realty Corporation (Assignor) executed a Master Deed with restrictions submitting a parcel of land covered by Transfer Certificate of Title No. 63868 and the improvements to be constructed thereon to the condominium form of ownership; that on October 10, 1991, the Centerpoint Condominium Unit Owners Association, Inc. (Assignee) was registered with the Securities and Exchange Commission (SEC) and this is composed of the condominium unit owners of the Centerpoint; that on September 7, 1997, the Assignor executed a Deed of Assignment in favor of Assignee regarding TCT No. 63868 for the following purposes: a) to hold title to the common areas; b) to constitute as the management body with the power to control, supervise, and oversee the operation of the condominium project; and in connection with the foregoing, you submitted the following documents: a) Deed of Assignment; b) TCT No. 63868; c) Tax Declaration; d) SEC Registration of Centerpoint Condominium Unit Owners Association, Inc.; e) Master Deed executed on October 4, 1989. In reply, please be informed that the aforementioned transfer/conveyance of San Mateo Heights Realty Corporation of the common areas to the corporation effected thru a Deed of Assignment is not subject to the capital gains tax and the withholding tax since the conveyance of the common areas is not for a monetary consideration but merely acknowledges and confirms the title and ownership of the Assignee. Considering that there is no monetary consideration for the conveyance of the common areas by San Mateo Heights Realty Corporation in favor of Centerpoint Condominium Unit Owners Association, Inc., the Deed of Assignment is not subject to the Documentary Stamp Tax imposed under Section 196 of the Tax Code of 1997 but the acknowledgment to the said deed is subject to the DST of P15.00 imposed under Section 188 of the Tax Code of 1997. (BIR Ruling No. 182-93 dated May 4, 1993) This ruling is being issued on the basis of the foregoing facts as represented. However, if it will be disclosed, upon investigation, that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)