BIR Ruling [DA-618-06]

October 17, 2006 BIR RULING [DA-618-06] 27 (D) (5); 196; DA-021-03 Department of Finance Roxas Boulevard Corner Pablo Ocampo, Sr. Street Manila Attention: Usec. Gabriel R. Singson, Jr . Gentlemen : This refers to your letter dated May 31, 2006 requesting for the assistance of this Office on the issuance of the requisite Certificate Authorizing Registration (CAR) on the real estate property to be conveyed by the Bangko Sentral ng Pilipinas (BSP) to the National Government (NG) through the Department of Finance (DOF) as property dividend pursuant to the provisions of Section 132 of Republic Act (RA) No. 7653. The facts, as represented, are as follows: The BSP is conveying a real property located at P. Casal St., Quiapo, Manila as payment of property dividend to NG for the year 2005. The 5,977.70 square meter property, presently known as the "BSP Motorpool," is covered by TCT No. 244914 issued by the Register of Deeds of Manila. The property will be conveyed by the BSP to NG, and from NG to the Office of the President (OP), in the light of the latter's request for the property to meet its additional office space requirements. The BSP is required under Section 132 of R.A. No. 7653 (BSP Charter) to remit to NG, by way of dividends, at least seventy-five percent (75%) of its profits. Likewise, R.A. No. 7656 (Dividend Law) authorizes Government-Owned and/or Controlled Corporations (GOCCs) to remit to NG a portion of their net earnings in the form of cash dividends, stock dividends, or property dividends. In order to comply with these provisions, the BSP has proposed the conveyance of the above-mentioned property as part of its dividends for the year 2005. To facilitate the transfer, the BSP, OP and DOF shall execute a Memorandum of Agreement and Deed of Conveyance covering the subject property. HIaTCc In reply, this Office rules that in light of the applicable provisions of the Code, the CAR may be issued by the Revenue District Officer (RDO) of the revenue district where the property is located so that title thereto may be transferred from BSP to the Republic of the Philippines without payment of capital gains and documentary stamp taxes. However, the documentary stamp tax on the notarial acknowledgment in the document shall be paid at P15.00 under Section 188 of the 1997 Tax Code, as amended. (BIR Ruling No. DA-021-03 dated January 27, 2003) 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, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner