Tax-Exemption of a Tax Credit Certificate may Not be Transferred to Another

October 22, 1991 BIR RULING NO. 214-91 106, E.O. 226 000-00 214-91 Gentlemen : This refers to your request for the assignment of Tax Credit Certificate No. SN 000086 in the amount of P247,109.07 in favor of a related company i.e. PACO AMUSEMENT CO. PHIL., INC. Tax exemption is exclusively a legislative grant (Art. VI, sec. 28 (4) of the Constitution). A tax credit certificate is issued so that the tax-exempt grantee could enjoy its exemption. Tax exemption is strictly personal to the grantee and, necessarily, in the enjoyment thereof thru the use of tax credit certificate, the same may not be transferred to another, even if the transferee is a subsidiary, sister of related firm, without legislative approval. Article 21 of the Omnibus Investments Code of 1987 (E.O. No. 226), as implemented by Rule VII of the Rules and Regulations of said Code, allows the transfer/assignment of the BOI tax credit certificates, subject to the conditions stated therein. In other words, in the absence of legislative permission, no transfer of tax credit certificate would be allowed. Unlike in BOI certificates, no law provides for the transfer of the tax credit certificate to another entity covering the value-added input tax, so that your instant request is hereby denied. aisadc This is the final decision of this Office on that matter. Very truly yours, (SGD.) JOSE U. ONG Commissioner