National Housing Authority

March 11, 2010 BIR RULING [SH-(002) 006-10] RA 7279; BIR Ruling No. 071-98 National Housing Authority Zamboanga Project Office 3rd Fl. Nationwide Appliance Center Bldg. Veterans Ave.,Zamboanga City Attention: Ms. Doris A. Siao Officer-in-Charge Gentlemen : This refers to your letter dated January 29, 2008, as indorsed by the Regional Director, Revenue Region No. 15, Zamboanga City, requesting for an exemption from the payment of capital gains and documentary stamp taxes under the provisions of Republic Act (RA) No. 7279, otherwise known as the Urban Development and Housing Act of 1992 relative to the transfer by the National Housing Authority (NHA) with Tax Identification No. (TIN) 000-916-384-000, of its properties to the following beneficiaries: Name TIN TCT No. Area 1. Sharon C. Ferrer 916-685-145 T-183,010 110 2. Roldan Q. Alabat 922-763-588 T-183,018 110 3. Jose Angelito Z. Almario 949-574-132 T-183,023 110 4. Ariel R. Martija 206-093-580 T-183,037 110 5. Angelyn F. Alegado 927-065-749 T-183,044 110 6. Isabel T. Apolinario 949-574-124 T-183,045 110 7. Dennis B. Estrada 190-183-478 T-183,063 110 8. Richard R. Torlao 931-954-259 T-183,077 110 9. Marilou A. Palmos 102-657-419 T-183,085 110 10. Halima S. Amilhamja 144-917-493 T-183,022 110 11. Paulino T. Cabrera, Jr. 925-184-831 T-183,027 110 12. Jonathan I. Iringan 217-820-295 T-183,061 102 per Sworn Statement of Ms. Doris A. Siao, OIC-NHA, Region IX and ARMM-B, the subject properties acquired by the beneficiaries are located at Catumbal, Cabaluay, Zamboanga City and shall be used for socialized housing, earmarked for the teachers, policeman and other government and private employees of the said locality. In reply, please be informed that: "Sec. 19. Incentives for the National Housing Authority. The National Housing Authority, being the primary government agency in charge of providing housing for the underprivileged and homeless, shall be exempted from the payment of all fees and charges of any kind, whether local or national, such as income and realty taxes. All documents or contracts executed by and in favor of the National Housing Authority shall also be exempt from the payment of documentary stamp tax and registration fees, including fees required for the issuance of transfer certificates of title." IEHScT Under the foregoing provision, NHA enjoys exemption from all forms of taxation. Thus, at the time of the sale of the above-stated properties NHA was not liable to pay any kind of taxes, fees and charges. Section 19 of RA 7279, gives incentives to the NHA, as the entity tapped by the National Government to carry out the purposes of RA 7279, in the form of exemptions from the payment of all national taxes, such as income tax and the corresponding creditable withholding tax or the capital gains tax, including exemptions from documentary stamp taxes upon documents or contracts executed by and in favor of the NHA. (BIR Ruling No. 071-98 dated May 25, 1998) In view of the foregoing, NHA is exempt from the payment of creditable withholding tax imposed under Section 57 (B) of the Tax Code of 1997, as implemented by Section 2.57.2 (J) of Revenue Regulations No. 2-98, or capital gains tax under Section 27 (D) (5) of the Tax Code of 1997, whichever is applicable on its sale of the afore-mentioned properties. NHA, is likewise is exempt from the payment of the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended. It is to be noted that under RMC 42-2001 dated October 5, 2001, the exemption from documentary stamp tax of NHA in connection with any of its socialized housing project extends to the other party (either seller or buyer) that deals or transacts with the NHA. Consequently, the afore-named beneficiaries being the buyers thereof, shall also be exempted from the payment of documentary stamp tax under Section 196 of the same Tax Code. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MARISSA O. CABREROS OIC-Assistant Commissioner Legal Service