BIR Ruling No. 082-10

October 5, 2010 BIR RULING NO. 082-10 Section 2 (t), Revenue Bulletin No. 01-03; BIR Ruling No. DA-394-04 Alonso & Associates Law Offices Philippine AXA Life Centre Unit 2207, 22nd Floor No. 1286 Sen. Gil Puyat Avenue Makati City Attention: Lai-lani Angelita B. Barcenas Gentlemen : This refers to your letter dated June 21, 2010 wherein it is represented that one of your clients, Mr. John Victor Tence, is considering setting up a realty corporation where two of the incorporators will contribute a parcel of land, located in Sta. Ana, Manila and covered by TCT No. 105460, with an area of 189.89 square meters, more or less; that one of the possible incorporator is both an American citizen and a Filipino citizen; that the shares of these two (2) incorporators will constitute more than 60% of the capital of the corporation, with the American citizen holding less than 40% of the total capital stock. TAaCED In connection with the foregoing, you are requesting for a ruling on whether the transaction mentioned above falls under Section 40 (2) (c) of the Tax Code of 1997, as amended, and whether or not the transfer is exempt from the payment of capital gains tax. In reply, please be informed that this Office cannot as yet issue a determinative ruling on the above matter considering that the issue is based on hypothetical situation, which is considered as a "No-Ruling Area" pursuant to Section 2 (t) of Revenue Bulletin 01-03. (BIR Ruling No. DA-394-04 dated July 21, 2004) Section 2 (t) of Revenue Bulletin 01-03 provides: "SECTION 2. List of No-Ruling Areas. The following shall hereby be construed and identified as "No-Ruling Areas": t) Request for rulings on issue/s or transactions based on hypothetical situations;" Be that as it may, we would be glad to assist you should you request for a ruling when these transactions are executed by the concerned parties. cDCSTA Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue