BIR Ruling No. 389-13

October 25 , 2013 BIR RULING NO. 389-13 RA 6657; BIR Ruling No. 012-01 Jaime E. Villafuerte Brgy. Sulivan, Baliuag, Bulacan Madam : This refers to your letter dated July 11, 2012, requesting for a ruling as to whether or not the sale of agricultural land by the Land Bank of the Philippines (LBP) under R.A. No. 6657, otherwise known as the "Comprehensive Agrarian Reform Law" is exempt from the payment of the capital gains tax and the documentary stamp tax. It appears that Land Bank of the Philippines is the registered owner of a parcel of land, identified as Lot 333, of the consolidation-subdivision plan (LRC) Pcs-11324, sheet 2, being a portion of the consolidation of lots 2662, 2667, 4061 and 2672, Baliuag Cadastre, LRC Cad Rec. No. 787 covered by Transfer Certificate of Title (TCT) No. RT-54440 (T-182076) issued by the Registry of Deeds for the Province of Bulacan. The aforesaid property is situated at Brgy. Sulivan, Baliwag, Bulacan with an area of five thousand eight hundred three square meters (5,803 sq.m.), more or less. On June 5, 2012, a Deed of Absolute Sale was executed by LBP conveying Lot 333-B of the subdivision plan Psd-03-184445, being a portion of Lot 333, (LRC) Pcs-11324, containing an area of four thousand nine hundred square meters (4,900 sq.m.), more or less, in favor of Mr. Jaime E. Villafuerte, the beneficiary of the said agrarian reform program. Certification with Com. Ref. 0191'12 was issued by Provincial Agrarian Reform Office of Bulacan, stating that the property covered by Deed of Absolute Sale under Doc. 93, Page No. 19, Book No. 12, Series of 2012 of Notary Public Conrado T. Danan of Pampanga is covered by R.A. No. 6657. In reply, please be informed that the transfer is exempt from capital gains tax and documentary stamp tax pursuant to Section 66 of Republic Act No. 6657 otherwise known as the "Comprehensive Agrarian Reform Law of 1988" which provides, viz. : "Sec. 66. Exemption from Taxes and Fees of Land Transfers. Transactions under this Act involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from capital gains. These transactions shall also be exempted from the payment of registration fees, and all other taxes and fees for the conveyance or transfer thereof. Provided, that all arrearages in real property taxes, without penalty or interest, shall be deductible from the compensation to which the owner may be entitled." TCIEcH Attached to the records is a Certification dated 13 November 2012 from the Provincial Agrarian Reform Office (PARO) of Bulacan, certifying that the Deed of Absolute Sale executed by and between LBP and Renato Fernando dated September 1, 2011 is covered by Sec. 66 of RA 6657. Accordingly, the transfer by Land Bank of the Philippines to Mr. Jaime E. Villafuerte of the four thousand nine hundred square meters (4,900 sq.m.) portion of the property covered by TCT No. RT-54440 (T-182076) is exempt from capital gains tax and documentary stamp tax pursuant to the aforecited provision. (BIR Ruling No. 012-01 dated March 14, 2001) 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.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue