BIR Ruling No. 163-84
BIR Ruling No. 163-84 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Oct 1, 1984
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October 1, 1984 BIR RULING NO. 163-84 245-00-004-83-163-84 Gentlemen : This refers to your letter dated January 20, 1984 requesting in behalf of your clients, Margarita M. de la Paz and Ponciano M. de la Paz, exemption from the payment of documentary stamp tax on the assignment and transfer of certain parcels of land to a corporation. It is represented that your clients are the registered owners of nine (9) parcels of land situated at Tandang Sora, Quezon City, that they are in the process of forming a real estate corporation (the Delways Corporation); that they have assigned all their rights and interests over the aforesaid parcels of land in full payment of their subscription to the shares of stock of the said corporation; and that eventually, all the 9 parcels of land will be transferred in the name of the corporation of which, your clients will be the controlling stockholders. In reply, please be informed that although your clients will be the controlling stockholders of the real estate corporation, the assignment or transfer of all their rights and interests over their parcels of land to the corporation under a deed of assignment is subject to documentary stamp tax based on the consideration or value received or contracted to be paid for such realty. (Sec. 245, Tax Code) A stock in a corporation is a valuable consideration for transfer of real properties. (Section 177, Documentary Stamp Tax Regulations) Accordingly, if parcels of real property are exchanged with stocks in a corporation, the latter is the consideration, the value of which shall be the basis of the documentary stamp tax due on the deed of assignment. Furthermore, on each original issue of certificate of stock by the corporation to your clients on account of the said transfer, there shall be collected a documentary stamp tax of P1.10 on each two hundred pesos, or fractional part thereof, of the par value of such certificates, pursuant to Section 224 of the Tax Code. techcd Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner
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