Exemption from Income Tax — General Professional Partnership

October 27, 1981 BIR RULING NO. 205-81 34-h 47-81 205-81 Messrs. Sycip, Gorres Velayo & Co. P.O. Box 589, Manila Attention: Atty . J . U . Ong Tax Division Gentlemen : This refers to your letter dated August 6, 1981 requesting confirmation of this Office that SGV & Co., is not subject to the final tax on capital gains realized from the sale of its real property at Beverly Hills, Cebu City to Mrs. Lilia Hermosisima on August 20, 1980. In reply, please be informed that the final tax on capital gains prescribed under Revenue Regulations No. 8-79 implementing Section 34(h) of the Tax Code as amended by Batas Pambansa Blg. 37 applies only to individual taxpayers. Moreover, SGV & Co. being a general professional partnership is not subject to income tax. [Sec. 24(a), Tax Code] Accordingly, S.G.V. & Co. is not required to pay the capital gains tax prescribed under Section 34(h) of the Tax Code, as amended. However, its partners, in their individual capacities, are liable to the payment of the capital gains tax on their respective shares of the gain. (Sec. 26, Tax Code) aisadc Very truly yours, ROMULO M. VILLA Acting Commissioner