BIR Ruling No. 652-12

December 19, 2012 BIR RULING NO. 652-12 RA 6657; BIR Ruling No. 012-01 Celestina R. Compendio 043 Rose St. Sulivan, Baliuag, Bulacan Madam : This refers to the 1st Indorsement of Revenue Region No. 5-Caloocan City, 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 14 of the subdivision plan Psd-03-002547, being a portion of Lot 521, L.R.C. Pcs-11324 covered by Transfer Certificate of Title (TCT) No. T-75784 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 six hundred forty five square meters (645 sq.m.), more or less. On February 29, 2012, a Deed of Absolute Sale was executed by LBP conveying the three hundred twenty two and 50/100 square meters (322.50 sq.m.) of the subject property in favor of Ms. Celestina R. Compendio, the beneficiary of the said agrarian reform program. 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." DEcSaI 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