Adelina Realty Corporation

July 28, 2008 BIR RULING [DA-(TAR-001) 081-08] Section 236; DA-148-2007 Adelina Realty Corporation 7/F La Paz Centre, Salcedo Street, Legaspi Village, Makati City Attention: Ms. Rosalinda G. Mangune Accounting Manager Gentlemen : This refers to your letter dated March 3, 2008 which was received by this Office by way of 1st Indorsement dated March 10, 2008 of Revenue Region No. 8, Revenue District Office No. 47, East Makati, requesting for an opinion as to whether or not Adelina Realty Corporation, whose head office/principal place of business is located at 7/F La Paz Centre, Salcedo Street, Legaspi Village, Makati City is required to register in Lipa, pay the corresponding registration fee, and maintain another set of Book of Accounts for Lipa. It is represented that Adelina Realty Corporation is engaged in real estate development; that it has projects in Lipa and Laguna; and that it does not have any branch or sales office in Lipa or Laguna, nor does it have any other branch, office, or outlet. In reply thereto, please be informed that Section 236 (A) and (B) of the Tax Code of 1997 provides: "SEC. 236. Registration Requirements. (A) Every person subject to any internal revenue tax shall register once with the appropriate revenue district officer: (1) Within ten (10) days from the date of employment, or (2) On or before the commencement of business, or (3) Before payment of any tax due, or (4) Upon filing of a return, statement or declaration as required in this Code. HTCAED The registration shall contain the taxpayer's name, style, place of residence, business and such other information as may be required by the Commissioner in the form prescribed therefor. A person maintaining a head office, branch or facility, shall register with the Revenue District Officer having jurisdiction over the head office, branch or facility. For purposes of this Section, the term "facility" may include but not limited to sales outlets, places of production, warehouses or storage places." "(B) Annual Registration Fee. An annual registration fee in the amount of Five hundred pesos (P500) for every separate or distinct establishment or place of business, including facility types where sales transactions occur, shall be paid upon registration and every year thereafter on or before the last day of January: Provided, however, That cooperatives, individuals earning purely compensation income, whether locally or abroad; and overseas workers are not liable to the registration fee imposed. The registration fee shall be paid to an authorized agent bank located within the revenue district, or to the Revenue Collection Officer, or duly authorized Treasurer of the city or municipality where each place of business or branch is registered." As gleaned from the above provision, registration of a person or entity maintaining a head office shall be made once with the appropriate revenue district office having jurisdiction over the same head office. In case a registered person decides to transfer his place of business or his head office or branches, it shall be his duty to update his registration status by filing an application for registration information update in the form prescribed therefor (BIR Form 1905) together with the transfer commitment form and pay the necessary fees and the application for registration for it. (BIR Form 1903) In the case of registration fees, the amount of five hundred pesos (P500) shall be paid for every separate or distinct establishment or place of business, including facility types where sales transactions occur. Accordingly, this Office hereby holds that there is no basis for the BIR to require Adelina Realty Corporation to re-register its business since it is already duly registered with RDO No. 47, Makati and does not maintain any branch and sales office in another place other than the principal place of business in Makati. Consequently, since Adelina Realty Corporation has no branch in Lipa and Laguna where it is currently undertaking real property development projects, it is not required to pay registration fees for the Lipa and Laguna projects. CITDES Section 232 (A) of the Tax Code of 1997 provides that all corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep a journal and a ledger or their equivalents. Moreover, since Adelina Realty Corporation does not maintain a branch office, the same is under no obligation to keep another set of accounts and records for its reportorial purposes. It shall file its tax return and pay taxes due thereon with the Revenue District Office where its principal place of business is located pursuant to Section 77 (A) of the Tax Code. 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 void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service