Samahang Maralita Catmon

March 8, 2018 BIR RULING NO. 366-18 RA 7279; BIR Ruling No. 383-13 Samahang Maralita Catmon Homeowners Association, Inc. Sitio 6, Gov. Pascual Ave. Brgy. Catmon, Malabon City Attention: AAA _______________ Gentlemen : This refers to your letter dated November 16, 2017 requesting exemption from the payment of capital gains tax and other taxes, relative to the transfer of title of land from Samahang Maralita Catmon Homeowners Association, Inc. in favor of BBB, CCC, DDD, and EEE pursuant to Republic Act 7279 otherwise known as the "Urban Development and Housing Act of 1992." As represented, Samahang Maralita Catmon Homeowners Association, Inc. (TIN #000-000-000-000) is the registered owner of the parcel of land covered by Transfer Certificate of Title (TCT) No. M-41911 1 issued by the Registry of Deeds for Malabon City, located at Sitio 6, Governor Pascual Ave.,Brgy. Catmon, Malabon City. It is a community association/cooperative duly registered with the Housing and Land Use Regulatory Board (HLURB) under Registration No. 01878. The aforesaid lot was acquired through a loan under the Community Mortgage Program (CMP) of the Social Housing Finance Corporation (SHFC) with Foundation for Alternatives, Inc. (FDA) as Originator. The said project was taken-out/paid on November 23, 2004 in the amount of PhP__________. The following are the beneficiaries therein: aDSIHc Name TIN No. TCT No. Area (sq.m.) Date of Deed of Sale BBB 000-000-000 M-41911 24.50 October 24, 2017 DDD 000-000-000 M-41971 26.00 October 25, 2017 EEE 000-000-000 M-41972 26.00 October 24, 2017 CCC 000-000-000 M-41970 26.00 October 25, 2017 The abovementioned beneficiaries are now in the process of transferring their respective properties to their name. In reply, please be informed that the transfer of parcels of land to the beneficiaries is not subject to either the capital gains tax imposed under Section 27 (D) (5) of the Tax Code of 1997, as amended, or the creditable withholding tax imposed under Revenue Regulations No. 2-98, as amended, implementing Section 57 (B) of the same Code, considering that the said transfer is merely a formality to finally effect the transfer of the said properties to the member-beneficiaries of your Association who actually bought the same from the former owner through your Association. In other words, the association is in fact transferring the ownership of the property to its member-beneficiaries who actually own the same. Furthermore, the said transfer is not subject to the donor's tax imposed under Section 99 of the Tax Code of 1997, as amended, since there is no donative intent or intention on the part of the Association to donate the said property to said member-beneficiary, considering that it could not donate property the ownership of which belongs to the donee (member-beneficiary) himself. ( BIR Ruling No. 383-13 dated October 22, 2013 ) It is noted that under Section 196 of the Tax Code of 1997, as amended, the deeds or documents subject to the documentary stamp tax imposed therein are those where the realty sold shall be granted, assigned, transferred, or otherwise conveyed to a purchaser or purchasers or to any other person or persons designated by such purchaser or purchasers, thereby excluding from its purview the instant case considering that the supposed purchaser is actually the owner thereof. aDSIHc Accordingly, the transfer of title of the above-described properties to BBB, DDD, EEE, and CCC is not subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended. However, the notarial acknowledgment to said deeds of conveyance is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. 383-13 dated October 22, 2013) It is, however, understood that the Certificate Authorizing Registration (CAR) shall only be issued after the submission of the requirements provided under Revenue Memorandum Order (RMO) 15-2003 and after it is established upon proper verification by the Revenue District Officer (RDO) concerned that, considering the rules on valuation of real property, the actual selling price per sale transaction of the house and lot packages in this case does not really exceed P450,000.00 and P180,000.00 for lot only. Thus, sale of a house and lot or lot only above the maximum amount shall be subject to the corresponding internal revenue taxes. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. A transfer from TCT No. M-30584/T-153.