Exemption from the Creditable Withholding Tax - Sale of a Parcel of Land

March 12, 1990 BIR RULING NO. 026-90 50 (b) 000-00 026-90 Sisters : This refers to your letter dated March 3, 1990 requesting that the sale of a parcel of land comprising of 173,270 square meters situated at Rabon, Municipality of Rosario, La Union, covered by TCT No. T-24736 in your favor by Philtrust Company on November 8, 1988 be exempt from the expanded withholding tax imposed under Revenue Regulation 12-89 as amended by Revenue Regulation No. 1-90. It is represented that you were assessed and demanded to pay by the BIR, San Fernando, La Union, the capital gains tax (expanded withholding tax) prescribed under Section 50(b) of the Tax Code as implemented by Revenue Regulations No. 12-89; and that since aforesaid Deed of Sale was executed (and notarized) on November 8, 1988, you are of the opinion that the said sale is not subject to said regulations. In reply, I have the honor to inform you that your request is hereby granted. Under Par. No. 1 of Revenue Memorandum Circular No. 7-90 clarifying some pertinent provisions of Revenue Regulations 12-89 as amended by Revenue Regulations No. 1-90 implementing Section 50(b) of the Tax Code, as amended, the date of Notarization appearing on the Deed of Sale shall be considered prima facie the date of consummation of the contract of sale. In the case of sales evidenced by public instrument notarized on or before November 30, 1989, the same shall be deemed consummated on the date the Deed of Sale/Transfer is filed with or submitted to the proper revenue office, except in exceptional circumstances where the taxpayer can prove by documentary evidence other than the Deed of Sale/Transfer that the public instrument was truly executed and notarized on the date shown thereon. Such being the case, and since the sale in your favor of the parcel of land situated at Rabon, Rosario, La Union covered by TCT No. T-24736 by Philtrust Company was consummated on November 8, 1988 the date of notarization of the deed evidencing such sale, this Office, is therefore, of the opinion that said sale is not covered by Revenue Regulations No. 12-89 as amended by Revenue Regulations No. 1-90, hence, not subject to the creditable withholding tax imposed under Section 50(b) of the Tax Code, as amended. cdta Very truly yours, (SGD.) EUFRACIO D. SANTOS Officer-in-Charge