Rockwell Land

May 20, 2009 BIR RULING [DA-(C-067) 232-09] 57 (B), 196; DA-178-2003 Rockwell Land Rockwell Information Center, Block 9 Rockwell Drive corner Plaza Drive Rockwell Center, Makati City Attention: Atty. Ma. Victoria Ortega-Pollisco Assistant Vice President-Legal Department Gentlemen : This refers to your letter dated November 7, 2007 requesting for confirmation of your opinion that the Deed of Conveyance transferring the common areas of the condominium project of Rockwell Land Corporation to the Manansala Condominium Corporation is not subject to the documentary stamp tax imposed under Section 196 of the National Internal Revenue Code of 1997. It is represented that on April 18, 2006, Rockwell Land Corporation, as the owner and developer of the Manansala Condominium Project, requested for a confirmation of opinion that no income tax and documentary stamp tax under the 1997 Tax Code is due on the conveyance of the parcels of land as part of the common areas of the condominium project to the Manansala Condominium Corporation; and that in BIR Ruling No. LD-000406-2006 dated November 17, 2006, the Regional Director of Revenue Region 8, Makati City, replied only on the exemption from the payment of income tax (creditable withholding tax) and has no reply to confirm the exemption from the payment of documentary stamp tax, hence this request. In reply, please be informed that since the Deed of Conveyance was made without consideration and is not in connection with a sale made to Manansala Condominium Corporation, no taxable income will be generated and a fortiori, no creditable withholding tax is payable and collectible. The purpose of the conveyance to Manansala Condominium Corporation is for the management of the project for the common benefit of the unit-owners. (Section 10, R.A. 4726) Moreover, Section 185 of the Revised Documentary Stamp Tax Regulations (Regulations No. 26)provides that "conveyances of realty not in connection with a sale, to trustees or other persons without consideration are not taxable." In view thereof, this Office is of the opinion as it hereby holds that the aforesaid transaction is not subject to the creditable withholding tax prescribed by Section 2.57 (8) of Revenue Regulations No. 2-98 implementing Section 57 (B), in relation to Section 27 of the Tax Code of 1997. Neither is it subject to the documentary stamp tax imposed under Section 196 of the same Code. However, the notarial acknowledgement to said Deed of Conveyance of Land and Common Areas is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-178-2003 dated June 5, 2003) 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 null and void. aIHSEc Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service