BIR Ruling [UN-339-95]

September 19, 1995 BIR RULING [UN-339-95] Chamber of Real Estate & Builders Associations, Inc. 3/F CREBA Center Don Alejandro Roces Ave. Cor. South "A" Street Quezon City Attention: Mr . Charlie V . Gorayeb Chairman of the Board and President Gentlemen : This refers to your letter dated 11 July 1995 requesting for a reconsideration of BIR Ruling No. 091-95 dated June 15, 1995, denying your request that the incentives especially tax exemption accorded to developers undertaking socialized housing projects under RA 7279 be extended likewise to socialized housing projects under other laws such as BP 220 and that a certificate from HLURB and CREBA that the project is for social housing shall suffice as basis for BIR to grant exemption. In reply, please be informed that Section 7 of Revenue Regulations No. 12-94 amending Revenue Regulations No. 6-85 otherwise known as the Expanded Withholding Tax Regulations provides, viz: "SEC. 7. Effectivity . the provisions of Revenue Regulations No. 8-94 notwithstanding, these Regulations shall take effect fifteen days after publication in the Official Gazette or in any newspaper of general circulation whichever shall come first." Revenue Regulations No. 12-94 was published in the July 1, 1994 issue of the Manila Bulletin, a newspaper of general circulation, thus it is effective on July 16, 1994. For sales transactions prior to July 16, 1994, the provisions of Revenue Regulations No. 1-90 as amplified by Revenue Memorandum Circular No. 7-90 shall apply. In effect, Revenue Regulations Nos. 7-94 and 8-94 were not enforced. Such being the case, sales transactions involving low-cost housing units, where the consideration for the sale of the lot or house and lot per transaction does not exceed P500,000.00 for the period from July 1 to July 15, 1994 shall be subject to 0% pursuant to Regulations No. 1-90 as amplified by Revenue Memorandum Circular No. 7-90 if the seller is registered with, and certified to as engaged in low-cost housing project under Batas Pambansa Blg. 220 by the housing and Land Use Regulatory Board (HLURB). Moreover, pursuant to Sec. 4(b) (1) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, sales of real property by a corporation which is registered with and certified by the HLURB as engaged in socialized housing projects pursuant to Republic Act No. 7279 otherwise known as the Urban Development and Housing Act of 1992 and where the selling price of the house and lot or lot only does not exceed P150,000.00 or at such adjusted amount of selling price for socialized housing as may later be determined and adopted by the HLURB pursuant to said law, shall not be subject to the expanded withholding tax. However, if you are not engaged in socialized housing projects under Republic Act No. 7279, then beginning July 16, 1994, your sales transaction shall be subject to the expanded withholding tax under Revenue Regulations No. 12-94. Accordingly, in the absence of a clear grant of tax exemption, we reiterate our denial of your request for lack of legal basis. (BIR Rulings No. 132-94 dated August 31, 1994) This is the final stand of this Office on the matter. cdtech Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)