Copyright 1994-2006 CD Technologies Asia, Inc.

Taxation 2005 1
April 13, 1999
BIR RULING NO. 048-99
248(A)(2)-000-00-048-99
New Ventures Realty Corporation
7901 Makati Avenue
1200 Makati City
Attention: Mr. Luis Maglaya
Corporate Secretary
Gentlemen :
This refers to your letter dated March 9, 1998 which was indorsed with this
Office by the Regional Director, Revenue Region No. 8, Makati City in a letter dated
March 30, 1998, wherein you requested for a confirmatory ruling/opinion regarding
the proper BIR Revenue District Office (RDO) to which documentary stamp tax
(DST) accruing on the deed of sale/conveyance of real property is payable. LLphil
It is represented that sometime in December, 1997, Augusto Cruz, as vendor
and a resident of Marikina City, and New Ventures Realty Corporation (NVRC), as
vendee corporation whose principal place of business is situated at 7901 Makati Ave.,
Makati City, executed a Deed of Absolute Sale covering a parcel of land located in
Marikina City; that pursuant to the said deed, capital gains tax, documentary stamp
tax and registration fees shall be for the account of the vendee; that on January 15,
1998, vendee effected payment of the DST (inclusive of surcharges) to the
PNB-Makati Avenue Branch, one of vendee's authorized agent banks (AAB); that the
capital gains tax (CGT) was paid in RDO No. 45 Marikina, the RDO which has
jurisdiction over the residence of the seller, Augusto Cruz; that a revenue examiner at
RDO No. 45 Marikina, however, insisted that the DST due on said sale transaction
should have been paid also in RDO No. 45 Marikina pursuant to Revenue
Memorandum Order (RMO) No. 17-97, and is now charging surcharges accruing
allegedly for paying at a wrong venue despite NVRC's position that the DST due on
said sale has been properly paid in RDO No. 50 South Makati.
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In reply, please be informed that RMO No. 17-97, was issued for the following
purposes:
1. To eliminate the inconsistency between procedures adopted by
Pilot and Non-Pilot District in the processing and issuance of Tax
Clearance Certificate (TCL) or Certificate Authorizing
Registration (CAR) thereby simplifying compliance on the part of
the taxpayer.
2. To provide a single uniform criterion place where the
taxpayer-transferor is registered (or required to be registered)
as a basis for determining the Revenue District Office (RDO),
regardless of whether it is pilot or non-pilot, which will be
authorized to process and issue TCL/CAR with respect to transfers
of real property, being consistent with RR 11-96 and the
management's policy of non-deviation from the Integrated Tax
Systems (ITS) rules in pilot RDOs.
3. To eliminate concurrent application to two (2) different rules for
jurisdiction with respect to transfers of real properties, namely:
place where property is located and place where the taxpayer is
registered.
4. To gradually reorient and educate the taxpayers in Non-Pilot
District towards the new system in preparation for the roll-out of
the Integrated Tax System.
Under paragraph 3.2 of RMO No. 17-97, the tax returns and all the taxes due
on the transaction involving transfer of real property (i.e.. capital gains tax or
creditable withholding tax, documentary stamp tax) should be filed and paid in the
RDO where the seller-transferor is registered. LLpr
Such being the case, and since the seller-transferor is registered or is required
to be registered in the Marikina RDO or RDO No. 45 the aforesaid payment of the
capital gains tax including the documentary stamp taxes due on said sale transaction
between Mr. Augusto Cruz as vendor and New Ventures Realty Corporation in
December, 1997 should have been paid at RDO No. 45, Marikina City, and not at
RDO No. 50, Makati City.
On the other hand, the documentary stamp tax payment made by the vendee at
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RDO No. 50 Makati City relative to the above-mentioned sale transaction although
made at a wrong venue should not, however, be subjected to the corresponding
penalty provided for under then Section 248 (a)(2) of the Tax Code, as amended [now
Section 248 (A)(2) of the Tax Code of 1997] as correctly stated by Regional Director
Antonio I. Ortega that RMO No. 17-97 dated April 1, 1997 was at the time of the said
payment by the vendee still on its experimental stage and had not yet been widely
disseminated so as to inform the tax-paying public about the repeal of the previous
BIR Rulings to the effect that the documentary stamp tax being an excise tax may be
paid at the place where the payor resides, whether he be the vendor or the vendee.
Very truly yours,
(SGD.) BEETHOVEN L. RUALO
Commissioner of Internal Revenue