BIR Ruling [DA-482-99]

August 23, 1999 BIR RULING [DA-482-99] Mr. Mariano C. Jabonete Unit 1119 PL 57, Cityland Citysquare Pioneer Pioneer cor. Reliance Street Pasig City Attention: Ms . Glenda A . Yara Attorney-in-Fact S i r : This refers to your letter dated August 9, 1999 requesting exemption from the payment of the capital gains tax in connection with the assignment of your rights over Parking Lots 29 and 30, both situated at Cityland Citysquare Pioneer, Pioneer cor. Reliance Streets, Pasig City, in favor of LITE PEJOMI Corporation, the title of which is still in the name of the developer, the Cityland Development Corporation. In reply, please be informed that assignment of rights in real property is not subject to the capital gains tax under Section 24(D)(1) 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 . (BIR Ruling Nos. 174-90 dated September 10, 1990; and DA-409-99 dated July 13, 1999) However, any gain realized by you 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)