Exemption Granted to the Philippine Bar Association from the Payment of Capital Gains Tax

October 26, 1988 BIR RULING NO. 519-88 21 (e) 355-88 519-88 Gentlemen : This refers to your letter dated August 23, 1988 requesting exemption from the payment of capital gains tax on the sale of your 840 square meters lot located at the corner of Aduana & Arzobispo Sts., Intramuros, Manila. In reply, please be informed that under Section 21(e) of the Tax Code, as amended, only individuals, including estates and trusts shall be taxed on the capital gains presumed to have been realized from the sale, exchange or other disposition of real property located in the Philippines classified as capital assets, at the rate of 5% based on the gross selling price or the fair market value prevailing at the time of sale, whichever is higher. Accordingly, the Philippine Bar Association not being an individual, estate or trust is not subject to the 5% capital gains tax on the sale of its 840 square meters lot situated at the corner of Aduana and Arzobispo Sts., Intramuros, Manila. However, any gain you may have realized from the aforesaid sale is subject to income tax under Section 24 of the Tax Code, as amended. cdtech Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner