Marcela Hassamal

March 3, 2017 BIR RULING NO. 102-17 Secs. 24 (D) (1) & 196 of the NIRC, as amended AAA ____________________ BBB ____________________ Mesdames : This refers to your letter dated November 17, 2016 requesting, in behalf of CCC, et al., for exemption from payment of capital gains tax. Documents disclosed that CCC, DDD, 1 EEE, FFF and GGG (landowners) are the registered owners of a parcel of land located in Farmers Avenue, Bambang, Pasig City covered by Transfer Certificate of Title * No. 14991 containing an area of two thousand four hundred twenty square meters (2,420 sq.m.); that the City of Pasig, through its City Council enacted City Resolution No. 191, Series of 2013, entitled " Resolution Authorizing the Honorable City Mayor Maria Belen A. Eusebio to pay Just Compensation for Lot 3-C-2 (LRC) Psd-277425 with an area of 2,420 square meters more or less, owned by CCC, et al. which was converted into road known as Farmer's Avenue, Barangay Bambang, Pasig City "; that the BIR Zonal Value of properties at Farmer's Avenue, Brgy. Bambang is fixed at Four Thousand Five Hundred Pesos per square meter (P4,500/sq.m.); that on June 19, 2014, the City Appraisal Committee determined the fair and reasonable market value of the property at Three Thousand Three Hundred Ninety per square meter (P3,390/sq.m.); that the landowners and the City Government of Pasig agreed that just compensation is at P3,390/sq.m. or total consideration of P_______________ and the payment of Notarial Fees and the CGT shall be for the account of the landowners while the DST shall be for the account of the City Government of Pasig. In reply, please be informed that your request for the exemption from payment of CGT is hereby denied for lack of legal basis. ATICcS However, for purposes of computation of the tax base of CGT and DST Sections 24 (D) (1) and 196 of the Tax Code of 1997, as amended, which provide that: "Section 24. Income Tax Rates. (D) Capital Gains from Sale of Real Property. (1) In General. The provisions of Section 39(B) notwithstanding, a final tax of six percent (6%) based on the gross selling price or current fair market value as determined in accordance with Section 6(E) of this Code, whichever is higher, is hereby imposed upon capital gains presumed to have been realized from the sale, exchange, or other disposition of real property located in the Philippines, classified as capital assets, including pacto de retro sales and other forms of conditional sales, by individuals, including estates and trusts: . . . ." (Emphasis supplied) xxx xxx xxx SEC. 196. Stamp tax on Deeds of Sale and Conveyances of Real Property. On all conveyances, deeds, instruments, or writings, other than grants, patents or original certificates of adjudication issued by the Government, whereby any land, tenement, or other realty sold shall be granted, assigned, transferred or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons designated by such purchaser or purchasers, there shall be collected a documentary stamp tax, at the rates herein below prescribed, based on the consideration contracted to be paid for such realty or on its fair market value determined in accordance with Section 6(E) of this Code, whichever is higher: Provided, That when one of the contracting parties is the Government the tax herein imposed shall be based on the actual consideration. Accordingly, the tax base of CGT shall be gross selling price or zonal value of the real property as determined in accordance with Section 6 (E) of the Tax Code of 1997, as amended, whichever is higher. With regard to the computation of the DST, Sec. 196 of the Tax Code of 1997, as amended, provides that when one of the contracting parties is the Government, the DST shall be based on the actual consideration thereof. Please be guided accordingly. TIADCc Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Heirs of DDD namely: CCC, EEE, FFF and GGG as evidenced by Deed of Extrajudicial Settlement of Estate of the Late DDD dated March 30, 2016, identified as Doc. No. 350, Page No. 71, Book XXXIX, Series of 2013, and estate tax had fully paid pursuant to Certificate Authorizing Registration Nos. eCR201500350653 and eCR201500350654 both dated August 19, 2016.