BIR Ruling [UN-236-94]

August 8, 1994 BIR RULING [UN-236-94] Games and Amusements Board Legaspi Towers 200 Paseo de Roxas, Makati Metro Manila Attention: Mr . Ricardo C . Villamil, Jr . Officer-in-Charge Gentlemen : This refers to your request for clarification as to the tax consequence on your purchase of four (4) condominium units covered by Condominium Certificate of Title No. S-595 of the Registry of Deeds for Metro Manila District IV from the Land Bank of the Philippines (LBP) by virtue of the Deed of Absolute Sale dated March 29, 1982. In reply, please be informed that although, both the vendor and the vendee in this case are government instrumentalities and agencies, P.D. No. 1931 and E.O. No. 93 effective June 11, 1984 and March 10, 1987 respectively, have withdrawn the tax exemptions of government institutions and agencies. Accordingly, any gain derived by the LBP, as the seller of four (4) condominium units to the Games and Amusements Board is considered as ordinary income subject to 35% income tax. However, since the said sale was consummated on March 29, 1982 when the LBP is still exempt from all taxes under R.A. 3844 (as amended by P.D.. Nos. 251 & 444) then LBP is not subject to the 35% corporate income tax on its income derived from the said transaction. (BIR Ruling No. 13-94 dated January 11, 1994). You are, however, subject to the documentary stamp tax imposed under Section 196 of the Tax Code, as amended, since under the Deed of Absolute Sale, the said tax is of the Vendee's (CAB) sole and exclusive account. cdtech Very truly yours, ALICIA P. CLEMENO Acting Assistant Commissioner (Legal Service)