Deed of Absolute Sale Executed by the Spanish Embassy

May 22, 1987 BIR RULING NO. 135-87 186 095-86 135-87 S i r : This refers to your letter dated May 18, 1987 stating that on December 28, 1983, the Spanish State has acquired for the use of its Chancery the fifth floor of ACT Tower, located at 135 Sen. Gil Puyat Avenue, Makati, Metro Manila, that due to circumstances beyond its control, the registration of the property has not been effected, and that the Revenue District Office of Makati advised you to pay the basic documentary stamp tax and surcharges on the document of sale in view of the provision of P.D. No. 1994. In reply, I have the honor to inform you that the Deed of Absolute Sale executed by the Spanish Embassy and the vendor, Active Construction, Inc. on December 28, 1983 has a provision stating: "4. the documentary and service stamps . . . other expenses relative to the execution of this deed of absolute sale and transfer of title in the name of vendee shall be for the vendee's account." Accordingly, considering the Spanish state's immunity from taxes and since the Spanish state, as the vendee, assumed payment of the documentary stamp tax, the aforesaid Deed of Absolute Sale is not subject to the documentary stamp tax. The provision of P.D. 1994 amending Section 186 of the Tax Code to the effect that "whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party thereto who is not exempt shall be the one directly liable for the tax" will not apply in the instant case, because the transaction took place prior to January 1, 1986 which is the effective date of the said decree. aisadc Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner