Bureau of Local Government Finance Opinion

March 11, 2005 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Alex Erlito S. Fider Picazo Buyco Tan Fider & Santos Law Offices 18/F Liberty Center 104 H. V. dela Costa Street Salcedo Village, Makati City Metro Manila S i r : This refers to your letter requesting in behalf of your client, Rufino Pacific Tower Condominium Corporation (Condominium Corporation for brevity), for confirmation that: "(a) the Government of the Republic of France which is the owner of two condominium units in Rufino Pacific Tower Condominium Building, cannot be held liable to pay for its proportionate share in the real property tax on the common shares of Rufino Pacific Tower Condominium Building; and "(b) the Condominium Corporation cannot likewise be made liable to pay for the proportionate share of the Government of the Republic of France in the real property tax on the common areas of Rufino Pacific Tower Condominium Building." The abovementioned request is made for reason that the said corporation was allegedly constrained to pay their real property tax due under protest to the City Treasurer's Office of Makati City, for the entire common areas of the building owned by the said corporation including the two (2) units acquired through sale by the Government of the Republic of France. You submitted that pursuant to Articles 23(1) and 34 of the 1961 Vienna Convention on Diplomatic Relations, the Government of the Republic of France is exempt from the payment of real property tax. However, the action on the said request was deferred pending submittal of the required copies of Condominium Certificates of Title (CCT). Recently, the required photo copies of CCT Nos. 85575 and 85576 covering Units 34-A and 34-B of the said condominium were submitted to this Bureau. In this connection, attention is invited to the letter dated January 5, 2004, copy enclosed, of this Bureau, treating on your similar request, which reads, to wit: "In this connection, attention is invited to the letter dated March 25, 2002, copy enclosed, of this Bureau, treating on a similar subject matter, which ruled as follows: "Article 23 of the Vienna Convention provides: "1. The sending State and the head of the mission shall be exempt from all national, regional or municipal dues and taxes in respect of the premises of the mission, whether owned or leased, other than such as represent payment for specific services rendered. "2. The exemption from taxation referred to in this Article shall not apply to such dues and taxes payable under the law of the receiving State by persons contracting with the sending State or the head of the mission. DSETcC "It is clear from the aforequoted provisions of the Convention that the Russian Federation is exempt from the payment of the transfer tax, real estate tax and other local taxes on the sale of its property in the Philippines." (Underlining supplied) Similarly, therefore, and considering that the Government of the Republic of France is also covered by the said Convention and that the ownership of the subject condominium units of the Condominium Corporation are already transferred in its name, the same, are exempt from the payment of real property tax. Hence, this Bureau agrees with your opinion that both the Government of the Republic of France and the Condominium Corporation cannot be held liable to pay the real property tax corresponding to the proportionate area of the Rufino Pacific Tower Condominium Building owned by the Government of the Republic of France. We trust that the issue is clarified. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director