Tax Exemption of Purchase of Land and Building from the Asset Privatization Trust

January 14, 1992 BIR RULING NO. 021-92 50 000-00 021-92 All High Philippines Corporation 7487 Bagtikan Street Makati, Metro Manila Attention: Ms . Racquel Y . Acquias Gentlemen : This refers to your letter dated September 23, 1991 requesting for a ruling about your liability for the 5% creditable withholding tax on your purchase of land and building from the Asset Privatization Trust (APT). It is represented that All High Philippines Corporation (All High. Phil.) is a corporation duly organized and existing under Philippine Law; that on the other hand, the Asset Privatization Trust (APT) is a government agency established under Proclamation No. 50 and acting in behalf of the government of the Philippines; that on February 26, 1990, All High Phil. offered to purchase from APT four parcels of land covered by TCT Nos. 34477, 34478, 34479 and 34480, all of the Registry of Deeds of Laguna, including all the buildings and improvements thereon; that such properties are more particularly described in APT Asset Specific Catalogue for GC 142 dated October 2, 2989; that All High Phil. has fully paid for such properties in the total amount of Twenty- Eight Million Six Hundred Sixty-Five Thousand Pesos (P28,665,000.00), the last installment of which was paid on July 19, 1990; that consequently, on September 17, 1991, the parties executed a Joint Deed of Absolute Sale stipulating as one of the conditions that All High Philippine shall be liable to pay all taxes, fees and expenses arising out of or relating to the execution and delivery of the Deed of Sale and the transfer and registration of title to the aforementioned properties; that pursuant thereto, All High Phil. paid the documentary stamp tax due thereon but not the 5% creditable withholding tax required of it. In reply, please be informed that the Fiscal Incentives Review Board, per its Resolution No. 4-87 dated April 13, 1987, restored the tax and duty incentives previously enjoyed by APT under the provisions of Proclamation No. 50, as amended. Specifically, Resolution 4-87 granted the APT exemption from capital gains tax, stock transfer tax, and any other taxes, fees, charges, imposts and assessments, except documentary stamp tax and registration fees, on the latter's transactions involving its (APT) and the corporation's assets held by it, effective March 10, 1987. In view thereof, it is the opinion of this Office as it hereby holds that All High Philippines, Corp. is not liable to pay the 5% creditable withholding tax on its purchase of properties (i.e. land and building) from the Asset Privatization Trust. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue