Antonio B. Gulay

June 21, 2010 BIR RULING [DA-(I-011) 104-10] R.A. 6657; DA-012-01 Antonio B. Gulay Poblacion, Ubay Bohol Sir : This refers to your request for exemption from whatever taxes due on your transfer of land with a total area of 49,972 square meters in favor of Hieden M. Cagampang and Catherine M. Cotanda (BENEFICIARIES) pursuant to Republic Act No. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1989". Per investigation conducted by Revenue District No. 84, Tagbilaran City, Antonio Gulay (GULAY) claims to be the owner of the parcel of land covering an area of 49,972 square meters of agricultural land located at Casate, Ubay, Bohol under OCT No. 55405; that this parcel of land became the subject of the Comprehensive Agrarian Reform Program of the government under the Voluntary Land Transfer/Voluntary Offer to Sell Scheme (VLT/VOS); that to comply with the provisions of said law, on February 8, 2008, GULAY entered into an agreement with BENEFICIARIES; that in their agreement, GULAY agreed to convey 49,972 square meters of land to the BENEFICIARIES. In reply, please be informed that since the 49,972 square meters of land conveyed by GULAY in favor of the BENEFICIARIES is pursuant to Republic Act No. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1989", no capital gain was derived by the landowner as a result of said transaction. Such being the case, the transfer is exempt from capital gains tax and documentary stamp tax pursuant to Section 66 of Republic Act No. 6657 which provides, viz. : "SECTION 66. Exemption from Taxes and Fees of Land Transfers. Transactions under this Act involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from capital gains. These transactions shall also be exempted from the payment of registration fees, and all other taxes and fees for the conveyance or transfer thereof; Provided, That all arrearages in real property taxes, without penalty or interest, shall be deductible from the compensation to which the owner may be entitled." Such being the case, the transfer by GULAY of the aforementioned 49,972 square meters of land in favor of the BENEFICIARIES is exempt from capital gains tax and documentary stamp tax pursuant to the aforecited provision. 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 Legal and Inspection Group