BIR Ruling No. 009-80

September 18, 1980 BIR RULING NO. 009-80 024-a 00-000 09-80 Pangasiwaan ng Pagpapautang Sa Pagsasaka (Agricultural Credit Administration) P. O. Box 310 M a n i l a Attention : Mr . Jesus J . Cruz Chief, SPAD Gentlemen: This refers to your letter dated June 3, 1980 requesting information on whether or not you are exempt from the payment of capital gains tax on the gains derived from the sale of your real property acquired thru foreclosures, assignments or executions and disposed of to generate additional funds for your cooperative development program and credit functions, pursuant to Section 118 of Republic Act No. 3844, as amended by Republic Act No. 6389, which reads: "Sec. 118. Exemption from Duties, Taxes and Levies . The Agricultural Credit Administration is hereby exempted from the payment of all duties, taxes, levies, and fees, including docket and sheriff's fees, of whatever nature or kind, in the performance of its functions and in the exercise of its powers hereunder. In reply, please be informed that Section 23 of Presidential Decree No. 1177, otherwise known as the Budget Reform Decree of 1977, subjects all government units to income tax. This provision has the effect of withdrawing from government corporations the tax exemption granted in their respective charters. Consequently, your tax exemption privileges under Section 118 of Republic Act No. 3844, as amended were deemed repealed by P.D. No. 1177. (Opinion No. 133, S. 1977, Minister of Justice). Accordingly, as a government agency, you are subject to income tax on the gains derived from the sale of the aforesaid real property at the rates prescribed by Section 24 of the Tax Code, as amended and not to the final schedular tax on capital gains imposed by Section 34(h) of the Tax Code, as amended by Batas Pambansa Blg. 37 and implemented by Revenue Regulations No. 8-79 which apply only to individual taxpayers. Very truly yours, RUBEN B. ANCHETA Acting Commissioner