Exemption of a BOI-Registered Enterprise from All Taxes

February 6, 1989 BIR RULING NO. 013-89 175 000-00 013-89 Gentlemen : This refers to your letter dated February 1, 1989 requesting for a ruling that you are only liable for the payment of the documentary stamp tax to the extent provided by RA 5186. It appears that you are a corporation registered with the Board of Investments (BOI) on April 8, 1974 as a pioneer enterprise for the production of Polyester Filament Yarn; that on March 10, 1986, the Board of Investments informed you that the 5-year extension effective January 1, 1980 shall entitle you to enjoy Section 8(a) incentives according to the following schedule: 100% January 1, 1980 December 31, 1984 75% January 1, 1985 December 31, 1987 50% January 1, 1988 December 31, 1989 20% January 1, 1990 November 30, 1991 and that you are being required by the Makati BIR Office to pay the full amount of documentary stamp tax on your sale of property in Buendia, Makati. In reply, please be informed that as a BOI-registered enterprise exempt from all taxes, except income tax, you are still entitled to 50% exemption from the documentary stamp tax on your sale of real property in Makati up to December 31, 1989. However, pursuant to Section 173 (formerly Section 186) of the Tax Code, as amended: "whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party thereto who is not exempt shall be the one directly liable for the tax". In other words, since you are exempt from the documentary stamp tax to the extent of 50%, the other party to the taxable document you will execute is directly liable to the other 50%. cdi Very truly yours, (SGD.) JOSE U. ONG Commissioner