Institute of the Sisters of Reparation, Inc.

December 7, 2007 BIR RULING [DA-635-07] 27 (D) (5), RR 2-98, 196, 188 DA-158-2007 Institute of the Sisters of Reparation, Inc. No. 13, Pioneer St., Moonwalk Village Las Pias City Attention: Sr. Monica Ma In Jahtu Gentlemen : This refers to your letter dated October 24, 2007 requesting in effect, for a ruling that the reconveyance of a property which is subject of a Deed of Trust with Institute of the Sisters of Reparation, Inc. as trustor and The Roman Catholic Bishop of Paraaque, Inc. as trustee , is not subject to the capital gains tax imposed under Section 27 (D) (5) of the Tax Code of 1997, as amended, nor to the creditable withholding tax under Revenue Regulations No. 2-98, as amended, and neither to the documentary stamp tax imposed under Section 196 of the same Tax Code. CaEIST It is represented that The Roman Catholic Bishop of Paraaque, Inc. is a corporation sole organized and existing under the laws of the Philippines with office address at Aguirre cor., F. Cruz Streets, BF Pioneer Street, Moonwalk Subdivision, Las Pias City; that it is referred as the trustee ; that on May 08, 2003 it bought in trust a parcel of land located at Bo. Pamplona, Las Pias City, covered by Transfer Certificate of Title No. T-87622 issued by the Register of Deeds of Las Pias City, which actually belongs to the Institute of the Sisters of Reparation, Inc., a religious congregation duly registered with the Securities and Exchange Commission under SEC Registration No. CN200419541; that the funds for the purchase of the property were provided entirely by said religious congregation; that The Roman Catholic Bishop of Paraaque, Inc. in acquiring said property holds the same in trust for said religious congregation; that the trustee transfers and conveys to the Institute of the Sisters of Reparation, Inc., the title to the parcel of land; that the latter releases and discharges forever the trustee of the trust and of all the obligations appertaining thereto; and that the Institute of the Sisters of Reparation, Inc., expresses its gratitude to the trustee for accepting the trust and assures that it will continue to do its missionary work with the same enthusiasm and favor. In reply, please be informed that since the transfer of the subject property by The Roman Catholic Bishop of Paraaque, Inc. in favor of the Institute of the Sisters of Reparation, Inc. is without monetary consideration and is merely a confirmation of title in favor of the beneficial owner thereof, the same is not subject to the capital gains tax imposed under Section 27 (D) (5) of the Tax Code of 1997, as amended, nor to the creditable withholding tax imposed under Revenue Regulations No. 2-98, as amended. HSCAIT Likewise, the conveyance of realties to trustees or other persons without consideration is not taxable under Section 185 of Revenue Regulations No. 26 otherwise known as the Revised Documentary Stamp Tax Regulations. Thus, the Release of Trust executed by The Roman Catholic Bishop of Paraaque, Inc. in favor of the Institute of the Sisters of Reparation, Inc. which is made without valuable or monetary consideration is not subject to the documentary stamp tax imposed under Section 196 of the 1997 Tax Code, as amended. However, the notarial acknowledgement to said deed is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the same Tax Code, as amended. This will authorize the Revenue District Officers (RDO) of the revenue district where the subject property is located to issue the corresponding Tax Clearance Certificate/Certificate Authorizing Registration with regard to the transfer by The Roman Catholic Bishop of Paraaque, Inc. of the above-stated realty in favor of the Institute of the Sisters of Reparation, Inc. without need of presentation of proof of payment of the capital gains tax/creditable withholding tax and documentary stamp tax. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. CETDHA Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service