Request for Certificate Authorizing Registration Relative to Sale by Dangwa Transportation Co. of Its Realties

August 13, 1998 BIR RULING NO. 119-98 57 (B)-000-00-119-98 Filipinas Daewoo Industries Corporation Governor's Drive, Brgy. Paliparan Dasmarias, Cavite Attention: Mr . Danilo D . Musa Gentlemen : This refers to your letters dated May 28, 1998 and June 1, 1998 requesting for a ruling directing the Revenue District Officer concerned to issue the Certificate Authorizing Registration (CAR) relative to the sale in your favor by Dangwa Transportation Co., Inc. (DTCI) of its realties covered by TCT Nos. 80401, 80400 and 125165 on March 3, 1998, but without the imposition of any civil penalties arising from the payment of the taxes due on said sale. Documents submitted show that on March 3, 1998, a Deed of Assignment in Payment of Obligation (Dacion En Pago) was made and executed by and between DTCI and Filipinas Daewoo Industries Corporation (FDIC), whereby both parties have agreed to enter into a compromise agreement for the amicable settlement and full liquidation of the outstanding obligation of DTCI by assigning by way of dacion en pago three (3) contiguous parcel of land registered in the name of DTCI located in the District of Sampaloc, Manila containing a total aggregate area of 839.60 sq.m. covered by TCT Nos. 80400, 80401 and 125165 with an appraised value of P21,201,000.00 in favor of FDIC, which accepted the assignment in the same instrument with the condition that the balance of P7,411,704.66 is still due and demandable from DTCI; that as a consequence, FDIC paid creditable withholding tax and documentary stamp tax in the respective amounts of P2,145,952.81 and P429,190.56 and certification fee due on said Deed at Revenue District Office No. 32, Quiapo, Manila; that upon review, it was fund out that RDO No. 32 has no jurisdiction to issue the CAR since it is the BIR at La Trinidad, Benguet where the head office DTCI is located and registered which has the jurisdiction to issue the corresponding CAR on said sale transaction; that the BIR, La Trinidad, Benguet informed you that there is still due from you the additional amount of P643,785.85 for having paid the tax at a wrong venue. In reply, please be informed that par. 3.1 and 3.2 of Revenue Memorandum Order No. 17-97 provides that on every sale, exchange, or transfer of real property whether classified as ordinary or capital asset made by an individual estate or trust or by a corporation, the TCL/CAR shall be issued by the RDO where the seller-transferor is registered or is required to be registered. The tax returns and all the taxes due on the transaction involving transfer of real property (i.e., capital gains tax or creditable withholding tax, documentary stamp tax) should be filed and paid with the RDO where the seller-transferor is registered. Such being the case, the taxes on the said sale transaction should be remitted/paid at the RDO, La Trinidad, Benguet where DTCI is registered or is required to be registered which shall also issue, after all taxes on the said sale transaction has been verified to have been paid, the corresponding CAR on the said sale transaction. Moreover, this Office hereby waives the additional amount of P643,785.85 being proposed to be assessed against DTCI for paying the tax at the wrong venue due to the fact that FDIC was made to believe by RDO No. 32 that it had jurisdiction to receive said payment and issue the corresponding CAR thereon. This shall serve as an authority for RDO No. 32 to transfer whatever payment FDIC made on the said sale transaction to the RDO at La Trinidad, Benguet. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. prLL Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue