BIR Ruling No. 036-80

October 27, 1980 BIR RULING NO. 036-80 024-a 000-00 36-80 Philippine National Bank Escolta, Manila Attention : Atty . Juan J . Diaz Senior Vice Pres . & Chief Legal Counsel Gentlemen: This refers to your letter dated January 25, 1980 requesting that a) PNB be issued a certification on its non-coverage of the capital gains tax imposed under Batas Pambansa Blg. 37; and b) refund be granted in the amount of P2,470.88 representing capital gains tax paid by Artemio C. Garde, Jr. for PNB's account. Documentary evidence submitted showed that PNB reimbursed the vendee, Artemio C. Garde, Jr. the amounts of P2,470.68 and P500.40 representing capital gains tax and donor's tax, respectively, or the total amount of P2,971.08 which the vendee paid in connection with the Deed of Absolute Sale of certain real property entered into by and between PNB as vendor and Artemio C. Garde, Jr. as vendee. In reply, please be informed that as a government-owned corporation, PNB is subject to income tax on the gains derived from the sale of real property to Artemio C. Garde, Jr. at the rates prescribed by Section 24 of the Tax Code, as amended, pursuant to Section 23 of Presidential Decree No. 1177 (see B.I.R. Ruling No. 127-79 dtd. 12/13/79 and B.I.R. Ruling No. 012-80 dtd. 2/5/80) and not to the final schedular tax on capital gains imposed by Section 34(h) of the Tax Code as amended by Batas Pambansa Bldg. 37 and implemented by Revenue Regulations No. 8-79 which apply only to individual taxpayers. Considering further, that the aforesaid sale of real property is for less than the adequate and full consideration in money or money's worth, PNB is also subject to the donor's tax on the excess of the fair market value of the property sold over the selling price or value of the consideration paid therefor and actually received by the vendor PNB pursuant to Sections 122 and 124 in relation to Section 120 all of the Tax Code, as amended. cdta In view thereof, it is hereby certified that you are not covered by the capital gains tax imposed under Batas Pambansa Bldg. 37 but to income tax on the gains derived from the sale of real property at the rates prescribed by Section 24 of the Tax Code, as amended, pursuant to Sec. 23 of P.D. No. 1177. Very truly yours, ROMULO M. VILLA Acting Commissioner