Uniphil Marketing Corporation

August 7, 2009 BIR RULING [DA-(C-170) 445-09] DA-044-02 Uniphil Marketing Corporation No. 500 Juan Luna Binondo, Manila Attention: Mr. Alexander Tang President Gentlemen : This refers to your letter dated July 27, 2009 stating that Uniphil Marketing Corporation is a domestic corporation organized and existing under the laws of the Philippines; that it is the developer of the condominium building known as Regina Garden II Condominium and constructed on a parcel of land with an aggregate area of 1,026.90 square meters covered by TCT No. 176424 issued by the Registry of Deeds for Manila; that on the other hand, Regina Garden II Condominium is a non-stock, non-profit corporation organized and existing under the laws of the Philippines with office address at 703 Reina Regente Street, Binondo, Manila; that it is established to own the property and the common areas covered by Condominium Certificate of Title (CCT) Nos. 14287, 14288, 14289, 14290, 14297, 14301, 14302, and 14308 and to manage the said properties; and that in compliance with Republic Act (R.A.) No. 4726, Uniphil Marketing Corporation thereby transfers, conveys and assigns unto Regina Garden II Condominium Corporation all the rights, title and interests of Uniphil Marketing Corporation in and to the properties above-described. Based on the foregoing representations, you now request exemption from the payment of creditable withholding tax prescribed in Revenue Regulations No. 2-98, as amended, and documentary stamp tax imposed under Section 196 of the Tax Code of 1997. In reply thereto, please be informed that since the transfer of the land and the common area is without consideration and is not in connection with a sale made to the Regina Garden II Condominium Corporation, no income was generated and a fortiori, no creditable withholding tax is payable and collectible. In fact, the transfer by Uniphil Marketing Corporation of the property and common area was made in favour of the individual unit owners of the project, and the purpose of the assignment to the Regina Garden II Condominium Corporation of its common areas and facilities is for its management, and for the common benefit and enjoyment of the members-unit owners. (Section 10, R.A. No. 4726) IAcDET Moreover, Section 196 of the Tax Code of 1997 provides that on all conveyances, deeds, instruments, or writings, other than grants, patents or original certificates of adjudication issued by the Government, whereby any land, tenement or other realty sold shall be granted, assigned, transferred or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons designated by such purchaser or purchasers, there shall be collected a documentary stamp tax, at the rates . . . prescribed, based on the consideration contracted to be paid for such realty or on its fair market value determined in accordance with Section 6 (E), infra, whichever is higher: . . . . Inasmuch as the transfer of the property and the common area and facilities to the Regina Garden II Condominium Corporation is not in connection with a sale, the same is not subject to documentary stamp tax prescribed in Section 196, supra. IN VIEW OF THE FOREGOING, this Office holds that the aforesaid transfer of the property and the common area is not subject to the creditable withholding tax prescribed in Revenue Regulations No. 2-98, as amended, 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, infra. However, the notarial acknowledgment to said deed of conveyance is subject to the documentary stamp tax of P15.00 only pursuant to Section 188, supra. HSEcTC 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, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service