Exemption from Withholding Tax on the Gains Derived from Sale of Properties

May 28, 1990 BIR RULING NO. 093-90 26 569-88 093-90 Gentlemen : This refers to your letter dated March 26, 1990 stating that you are a non-stock and non-profit religious corporation duly organized and existing under the laws of the Republic of the Philippines, that you are the owner of two (2) parcels of land situated in Tandang Sora, Quezon City, covered by TCT Nos. 170507 and 176616; that the said lots which are the only properties of that organization were acquired thru funds donated by the people of the Arab Republic of Libya and that you have decided to sell said properties the proceeds of which shall be utilized exclusively for the purchase of a suitable property with a building thereon for the use of Filipino moslems. aisadc In connection thereto, you are requesting exemption from withholding tax on the gains that you will derive from the said sale. In reply thereto, I have the honor to inform you that the gain to be realized by you from the sale of your aforementioned properties is not subject to tax it appearing that the proceeds of such sale would be used exclusively in the purchase of another property, in furtherance of the religious purposes for which the corporation was organized. (Opinion No. 45, S. 1959, Secretary of Justice, Manila Polo Club vs. Collector of Internal Revenue (CTA Case No. 293, August 31, 1959; Xavier School, Inc. vs. Commissioner, CTA Case No. 1682, October 8, 1969; BIR Ruling No. 569-88) Accordingly, said gain is exempt from income tax and consequently from the expanded withholding tax under Revenue Regulations No. 12-89, as amended by Revenue Regulations No. 1-90. (BIR Ruling No. 010-90) cd Very truly yours, (SGD.) JOSE U. ONG Commissioner