Tax Consequence of the Consolidation and Transfer of Titles

September 12, 1989 BIR RULING NO. 200-89 24 000-00 200-89 Gentlemen : This refers to your letter dated August 9, 1988 requesting in effect a ruling confirming your opinion that the consolidation and transfer of titles in your name or that of the Asset Privatization Trust (APT) of your foreclosed properties of Asialand Development Corporation are exempt from all fees and taxes pursuant to Section 35 of Proclamation No. 50 of the President of the Philippines. It is represented that the assets of Asialand Development Corporation are among those transferred by you to the National Government, with the Asset Privatization Trust as trustee. cdtech In reply, please be informed that Section 35 of Proclamation No. 50 of the President of the Philippines provides, viz: "Sec. 35. Exemption from Taxes, Fees, and Other Charges . The provisions of any law to the contrary notwithstanding, the Trust as well as the corporations and assets held by it, shall be exempt from all taxes, fees, charges, imposts, and assessments arising from or occasioned by the passing of title over such corporations or assets from the government institutions to the Trust and/or from the Trust to a private acquisitor or buyer imposed by the National Government or any subdivision thereof including but not limited to stock transfer taxes, capital gains taxes, documentary stamps, registration fees and the like: Provided, that in case the said government institutions acquired the said assets by foreclosure, the non-payment of similar taxes, fees charges, imposts, and assessments shall not be a bar to the consolidation of title in the foreclosing institutions and the subsequent passing of title to the Trust or the corporations held by the Trust. "The sale or transfer of such corporations or assets shall not be enjoined or hindered by the existence of any liens by way of taxes, charges or other assessments in favor of the government at the time of sale or transfer: Provided, that the proceeds from such sale or transfer shall be subject to a tax lien and first be applied to satisfy such obligations secured by said liens." (emphasis supplied) Accordingly, and since only the passing of title over such corporations or assets from government institutions like you to the Trust and/or from the Trust to a private acquisitor or buyer are exempt from all taxes, fees, charges, imposts, and assessments, the consolidation and transfer of titles in your name or that of APT of your aforementioned foreclosed properties of Asialand Development Corporation are subject to the 35% of corporate income tax imposed under Section 24 of the Tax Code, as amended and to the corresponding documentary stamp tax imposed under Section 24 of the Tax Code, as amended and to the corresponding documentary stamp tax imposed under Section 196 of the same Code. Consequently, your request cannot be granted. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner