Exemption of the Contract of Lease Entered into by the Government and the Hale Shoe Co.

September 23, 1958 BIR RULING NO. 531-58 The Officer-in-Charge Bureau of Buildings and Property Administration Manila S i r : This refers to the question of whether or not the contract of lease entered into by the Government as the lessee and the Hale Shoe Co. as the lessor for the lease of the Esco Building at Canonigo, Paco, Manila, is subject to the documentary stamp tax prescribed in Section 231 of the National Internal Revenue Code. cdt Article 1657 of the Civil Code provides as follows: "Article 1657. The lessee is obliged: xxx xxx xxx "(3) To pay the expenses for the deed of lease." Inasmuch as under the abovequoted provision of the Civil Code the tax is payable by the Government which is exempt from tax, the aforesaid contract of lease is exempt from the documentary stamp tax prescribed in Section 231 of the Tax Code. cdta Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue