World Class Properties, Inc.

August 7, 2009 BIR RULING [DA-(C-171) 447-09] Sec. 27, 57 (B), 188; DA-305-00 World Class Properties, Inc. Unit 2301 Antel 2000, 121 Valero Street Salcedo Village, Makati City Attention: Ms. Elena D. Jao President Gentlemen : This refers to your letter dated May 19, 2009 requesting for a ruling that the conveyance by World Class Properties, Inc. ("WCP") of the eighty-nine (89) parking slots in the condominium project, known as "The Antel Global Corporate Center", in favor of Antel Global Corporate Center Condominium Association, Inc., ("Condominium Association") is exempt from creditable withholding tax and documentary stamp tax. TSAHIa It is represented that WCP, a domestic corporation, is the registered owner of a condominium project known as "The Antel Global Corporate Center"; that on the other hand, the Condominium Association is a non-stock, non-profit corporation organized by the homeowners in the said project organized for the purpose of holding title to the land and common areas of the condominium project including the parking slots of the condominium; that a Deed of Conveyance was executed by and between WCP and the Condominium Association whereby the former conveyed title to the 89 parking slots in favor of the latter, free from all liens and encumbrances; that the said Deed of Conveyance was executed without any monetary consideration, in pursuance of the requirements of R.A. No. 4726, otherwise known as the Condominium Act, as amended; and that the said conveyance is therefore sought to be exempted from the creditable withholding tax and documentary stamp tax inasmuch as said conveyance is being done simply to comply with the requirements of the Condominium Act, and for the protection of the unit-owners. In reply, please be informed that since the Deed of Conveyance above-mentioned is without consideration and is not in connection with a sale made to the condominium corporation, no income was generated and a fortiori, no creditable withholding tax is payable and collectible. The purpose of the assignment to the condominium corporation is for the management of the parking slots for the common benefit of the unit-owners. (Section 10, R.A. No. 4726) In view thereof, this Office is of the opinion as it hereby holds that the aforesaid Deed of Conveyance is not subject to the creditable withholding tax prescribed by 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 Tax Code of 1997 since there is no monetary consideration in the subject assignment. However, the notarial acknowledgment to said Deed of Conveyance is subject to the documentary stamp tax of P15.00 only pursuant to Section 188 of the said Code. 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. SECHIA Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service