BIR Ruling [UN-089-95]

March 7, 1995 BIR RULING [UN-089-95] MEMORANDUM FOR: RDO David J. Alarcon Revenue District No. 54 Revenue Region No. 8 Trece Martires City Cavite In connection with your Memorandum dated November 22, 1994 requesting for an opinion on the tax treatment of the 1994 upgraded Cavite land market values shown on the Tax Declaration issued for 1994 or later years for capital gains, creditable withholding, transfer and documentary stamp taxes purposes, please be informed that in view of the effectivity of the 1994 market values shown on the Tax Declarations issued by the City, Provincial or Municipal Assessor, the value of the real property to be used in computing internal revenue taxes on sales, transfers or other disposition of real property, including improvements thereon, shall be: 1. the fair market value of the property as determined by the Commissioner of Internal Revenue, i.e., zonal value per latest schedule of approved zonal values of real properties or the 1994 zonal values, or 2. the fair market value as shown in the schedule of values issued by the Provincial, City or Municipal Assessor in the 1994 Tax Declaration, whichever is higher. In other words, in the case of real properties (whether land or improvement) where the zonal values have already been determined by the Commissioner of Internal Revenue, the tax base for sales, transfers or other disposition of the said property shall be the latest or the 1994 zonal value, OR the fair market value as shown in the 1994 Tax Declaration of the property, whichever is higher. In the case, however, of real properties (whether land or improvement) where the zonal value has not yet been determined, the basis of the said internal revenue taxes on the said properties shall be the fair market value which appears in the 1994 Tax Declaration of the property involved in view of the effectivity of the said fair market values pursuant to Sec. 219 of RA 7160, otherwise known as The Local Government Code of 1991 and the last paragraph of the Local Assessment Regulations No. 1-92 dated October 6, 1992. In such case, RAMO No. 2-91 dated February 18, 1991 increasing the fair market value of property per Tax Declaration by 100%/150% to cover adjustment in value shall not be applied. Please be guided accordingly. BEETHOVEN L. RUALO Deputy Commissioner Operations Group