The Law Firm of Belo Gozon Elma Parel Asuncion & Lucila

November 6, 2009 BIR RULING [DA-(OSL-036) 656-09] 199 (f); DA-019-05; DA-090-07; DA-148-08 The Law Firm of Belo Gozon Elma Parel Asuncion & Lucila 15th and 16th Floor, Sagittarius Condominium H.V. dela Costa Street, Salcedo Village Makati City Attention: Attys. Roberto Rafael V. Lucila Sheryll J. Mallari Edizer A. Enriquez Gentlemen : This refers to your letter dated August 24, 2009 requesting, in behalf of your client, Asset Pool A (SPV-AMC), Inc. ("APA"), for a ruling that the assignment of rights, titles and interests in and to the outstanding principal loans of Prime Orion Philippines, Inc. ("POPI") amounting to Php834,225,905.54 (the "Assigned Loan") by United Coconut Planters Bank ("UCPB") to APA as evidenced by a Deed of Absolute Sale dated June 23, 2005 is exempt from documentary stamp tax pursuant to paragraph (f), Section 9 of R.A. 9243. TEDHaA It is represented that APA is a special purpose vehicle registered under Securities and Exchange Commission ("SEC") Registration No. CS200414547 while UCPB is a universal bank registered under SEC Registration No. 23009. On June 23, 2005, UCPB transferred all of its rights, titles, and interests in and to the Assigned Loan, including all security interests, mortgages, reimbursement rights, resale rights and similar rights and privileges relating to such loan or indebtedness under a document entitled Deed of Absolute Sale of even date (the "Assignment of Rights"). The Assigned Loan is evidenced by a Convertible Note dated December 11, 2000 (the "Convertible Note") with a maturity date of December 11, 2005. Included in the aforesaid assignment is the mortgage right over a parcel of land located in Mandaue City with TCT No. 51080 (the "Mandaue Property") which secures a portion of the Assigned Loan up to Php290,000,000.00. Upon execution by UCPB and APA of the Deed of Absolute Sale, the Convertible Note, as well as the securities of the Assigned Loan, was endorsed and turned over by UCPB in favor of APA including TCT No. 51080. The Assignment of Rights did not in any manner change the maturity date or the remaining period of coverage of the Assigned Loan as provided under the Convertible Note, which remained to be December 11, 2005. The conditions of the mortgages and other securities of the Assigned loan were likewise not changed by the aforesaid Assignment of Rights. In light of the above, you now request for a ruling that the foregoing Deed of Absolute Sale is exempt from the documentary stamp tax pursuant to paragraph (f), Section 9 of R.A. 9243, which amended Section 199 of the National Internal Revenue Code of 1997 ("Tax Code"). In reply, please be informed that Sec. 9 of Revenue Regulations ("RR") No. 13-2004 (Implementing the Provisions of R.A. 9243, An Act Rationalizing the Provisions on the Documentary Stamp Tax of the National Internal Revenue Code of 1997, as amended) identifies the documents and papers not subject to documentary stamp tax: "SEC. 199. Documents and Papers Not Subject to DST. The provisions of Section 173 to the contrary notwithstanding, the following instruments, documents and papers shall be exempt from the DST: xxx xxx xxx (f) Assignment or transfer of any mortgage, lease or policy of insurance, or the renewal or continuance of any agreement, contract, charter, or any evidence of obligation or indebtedness, if there is no change in the maturity or remaining period of coverage from that of the original instrument." cEaTHD In BIR Ruling No. DA-090-07 issued on February 14, 2007, citing therein BIR Ruling No. DA-019-05 dated January 19, 2005, this Office had occasion to rule that the assignment or transfer or the renewal or continuance of any evidence of obligation or indebtedness (such as a promissory note) is exempt from documentary stamp tax if there is no change in the maturity date or remaining period of coverage from that of the original instrument pursuant to Section 199 (f) of the Tax Code, as amended by RA 9243. In the instant case, although the Assignment of Rights was captioned as Deed of Absolute Sale, the substance of the said document clearly shows that what were assigned, transferred or conveyed therein by UCPB to APA are merely the rights, titles and interests in the POPI's loan and its accompanying mortgages and other security interests without any provisions changing the conditions of the mortgage nor the maturity date or remaining period of coverage of the Assigned Loan from that of the original instrument. Such being the case, this Office hereby confirms your opinion that the Assignment of Rights under the Deed of Absolute Sale executed between UCPB and APA is not subject to documentary stamp tax under Sec. 199 (f) of the Tax Code, as amended by RA No. 9243. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon its investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service