BIR Ruling [UN-147-94]

May 4, 1994 BIR RULING [UN-147-94] The Revenue District Officer Revenue District Office No. 45 Marikina, Metro Manila S i r : This refers to your 1st Indorsement dated March 11, 1994 requesting opinion as to whether or not a Deed of Redemption covering a parcel of residential lot together with its improvements thereon situated at Bayanbayanan, Marikina, Rizal, under TCT No. N-42145 executed on January 26, 1994 by the Philippine National Bank in favor of the mortgagor, Mr. Eddie V. Guzman, Candazo corner L. De Guzman Sts., Concepcion, Marikina, Metro Manila is subject to the creditable withholding tax on sale, exchange or transfer of real property under Revenue Regulations No. 1-90 and the documentary stamp tax. In reply thereto, please be informed that a Deed of Redemption is not subject to the creditable withholding tax on sale, exchange or transfer of real property under Revenue Regulations No. 1-90 implementing Section 50(b) of the Tax Code, as amended and to the documentary stamp tax under Section 196 of the Tax Code, as amended. The transaction which is subject to the creditable withholding tax on sale, exchange or transfer of real property under Revenue Regulations No. 1-90 and to the documentary stamp tax under Section 196 of the Tax Code, as amended is the conveyance of real property to the purchaser . This is not so in redemption of real property which involves restoration of the property to the mortgagor-debtor from the purchaser. Said Deed of Redemption is however, subject to the ten (P10.00) pesos documentary stamp tax imposed under Section 188 of the Tax Code, as amended. (BIR Ruling No. 530-88 dated November 7, 1988). Very truly yours, ALICIA P. CLEMENO Actg. Assistant Commissioner Legal Service