BIR Ruling No. 292-13

July 29, 2013 BIR RULING NO. 292-13 Sections 24 (D) (1), 188 & 196 of the Tax Code of 1997, as amended; BIR Ruling No. 360-11 Dr. Maria Cristina A. Santos 9661 Diamond St., Umali Subdivision Los Baos, Laguna Rolando G. Gutierrez 18 P. Zulueta St. San Pablo City Gentlemen : This refers to your letter dated August 6, 2010 endorsed by Revenue Region No. 9-San Pablo City, requesting for tax exemption on the transaction between Mr. Redentor A. Aquino and Mrs. Ofelia G. Gutierrez-Karingal involving their respective parcels of land. IACDaS It appears that the parties want to change the name of Redentor A. Aquino, as registered owner of TCT No. T-35744 to Ofelia G. Gutierrez married to Manuel V. Karingal; and TCT No. T-35744 indicated in Tax Declaration No. 94-071-00436 (declared in the name of Redentor A. Aquino) to be transferred to Tax Declaration No. 07-071-00369, declared in the name of Ofelia G. Gutierrez. The parties herein agreed to request the Register of Deeds of San Pablo City and the City Assessor of San Pablo City to make the necessary correction. Moreover, the parties executed a Memorandum of Agreement to request the Register of Deeds and City Assessor to correct the titles and tax declarations of their respective properties by changing the name of the titles and tax declarations with that of the other. They are requesting tax exemption allegedly because there is neither transfer nor exchange of properties. In reply, we regret to inform you that your request for tax exemption cannot be granted for lack of legal basis. Section 24 (D) of the Tax Code of 1997, as amended, provides, viz. : Section 24 (D). Capital Gains from Sale of Real Property. (1) In General. The provisions of Section 39 (B) notwithstanding, a final tax of 6% based on the gross selling price or current market value as determined in accordance with Section 6 (E) of this Code, whichever is higher, is hereby imposed upon the capital gains presumed to have been realized from the sale, exchange and other dispositions of real property located in the Philippines, classified as capital assets, including pacto de retro sales and other forms of conditional sales, by individuals, including estates and trusts: . . ." The changing of name of the titles and tax declarations with that of the other is covered by the clause "other dispositions of real property" under Section 24 (D) of the Tax Code of 1997, as amended, and therefore subject to the capital gains tax imposed therein. The conveyance being a disposition of real property under Section 24 (D) of the Tax Code, as amended, is likewise subject to the documentary stamp taxes imposed in Section 188 and Section 196 of the Tax Code, as amended. (BIR Ruling No. 360-11 dated September 30, 2011) ACEIac Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue