BIR Ruling [DA-384-03]

October 23, 2003 BIR RULING [DA-384-03] 5-R Agro-Industrial Corporation 334 G. Angeles Street Paso de Blas Valenzuela, Metro Manila Attention: Mr. Porfirio L. Rodriguez President and General Manager Gentlemen : This refers to your letter dated September 1, 2003 requesting for the issuance of the Certificate Authorizing Registration (CAR), involving the eleven (11) parcels of land subject of a Deed of Assignment executed on August 20, 1998, after paying the corresponding documentary stamp taxes together with the surcharge, penalties and interest in the aggregate amount of P500,935.94 per assessment issued by the revenue officers of RDO No. 24, so that titles to the aforesaid properties may now be transferred in the name of 5-R Agro-Industrial Corporation. In your aforementioned letter dated September 1, 2003, the reason for your request for re-computation of the documentary stamp tax on November 11, 2002 is that you believe that you have sufficiently paid the documentary stamp taxes on the said transaction based on an amended zonal valuation for the eleven (11) parcels of land subject of the Deed of Assignment; that although you paid under protest, for the assessments allegedly for late payment, wrong zonal valuation and other excuses, which to your mind has been complied with in good faith, you are now willing to waive voluntarily any or all excess payment made relative to the said transaction. IHEDAT In reply thereto, please be informed that Section 58(E) of the Tax Code of 1997 provides "(E) Registration with Register of Deeds. No registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner or his duly authorized representative has certified that such transfer has been reported, and the capital gains or creditable withholding tax, if any, has been paid: . . ." The Deed of Assignment executed on August 20, 1998 qualifies as a tax free exchange as approved by the BIR under BIR Ruling No. S40-008-99 to which the corresponding documentary stamp taxes were duly paid in the aggregate amount of P500,935.94 both under Sections 175 and 196 of the Tax Code of 1997. This will therefore serve as an authority for the Revenue District Officer (RDO) of the revenue district where the properties are located to issue the corresponding CAR for the registration of the aforesaid properties in favor of the transferee corporation, 5-R Agro-Industrial Corporation. Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service