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April 13, 1999

BIR RULING NO. 048-99

248(A)(2)-000-00-048-99

New Ventures Realty Corporation7901 Makati Avenue1200 Makati City

Attention: Mr. Luis MaglayaCorporate Secretary

Gentlemen :

This refers to your letter dated March 9, 1998 which was indorsed with thisOffice by the Regional Director, Revenue Region No. 8, Makati City in a letter datedMarch 30, 1998, wherein you requested for a confirmatory ruling/opinion regardingthe 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 vendorand a resident of Marikina City, and New Ventures Realty Corporation (NVRC), asvendee 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 inMarikina City; that pursuant to the said deed, capital gains tax, documentary stamptax 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 thePNB-Makati Avenue Branch, one of vendee's authorized agent banks (AAB); that thecapital gains tax (CGT) was paid in RDO No. 45 Marikina, the RDO which hasjurisdiction over the residence of the seller, Augusto Cruz; that a revenue examiner atRDO No. 45 Marikina, however, insisted that the DST due on said sale transactionshould have been paid also in RDO No. 45 Marikina pursuant to RevenueMemorandum Order (RMO) No. 17-97, and is now charging surcharges accruingallegedly for paying at a wrong venue despite NVRC's position that the DST due onsaid sale has been properly paid in RDO No. 50 South Makati.

baniquedcharging surcharges accruingallegedly for paying at a wrong venue despite

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In reply, please be informed that RMO No. 17-97, was issued for the followingpurposes:

1. To eliminate the inconsistency between procedures adopted byPilot and Non-Pilot District in the processing and issuance of TaxClearance Certificate (TCL) or Certificate AuthorizingRegistration (CAR) thereby simplifying compliance on the part ofthe taxpayer.

2. To provide a single uniform criterion place where thetaxpayer-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 beauthorized to process and issue TCL/CAR with respect to transfersof real property, being consistent with RR 11-96 and themanagement's policy of non-deviation from the Integrated TaxSystems (ITS) rules in pilot RDOs.

3. To eliminate concurrent application to two (2) different rules forjurisdiction with respect to transfers of real properties, namely:place where property is located and place where the taxpayer isregistered.

4. To gradually reorient and educate the taxpayers in Non-PilotDistrict towards the new system in preparation for the roll-out ofthe Integrated Tax System.

Under paragraph 3.2 of RMO No. 17-97, the tax returns and all the taxes dueon the transaction involving transfer of real property (i.e.. capital gains tax orcreditable withholding tax, documentary stamp tax) should be filed and paid in theRDO where the seller-transferor is registered. LLpr

Such being the case, and since the seller-transferor is registered or is requiredto be registered in the Marikina RDO or RDO No. 45 the aforesaid payment of thecapital gains tax including the documentary stamp taxes due on said sale transactionbetween Mr. Augusto Cruz as vendor and New Ventures Realty Corporation inDecember, 1997 should have been paid at RDO No. 45, Marikina City, and not atRDO No. 50, Makati City.

On the other hand, the documentary stamp tax payment made by the vendee at

baniquedwhere the seller-transferor is registered.

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RDO No. 50 Makati City relative to the above-mentioned sale transaction althoughmade at a wrong venue should not, however, be subjected to the correspondingpenalty provided for under then Section 248 (a)(2) of the Tax Code, as amended [nowSection 248 (A)(2) of the Tax Code of 1997] as correctly stated by Regional DirectorAntonio I. Ortega that RMO No. 17-97 dated April 1, 1997 was at the time of the saidpayment by the vendee still on its experimental stage and had not yet been widelydisseminated so as to inform the tax-paying public about the repeal of the previousBIR Rulings to the effect that the documentary stamp tax being an excise tax may bepaid at the place where the payor resides, whether he be the vendor or the vendee.

Very truly yours,

(SGD.) BEETHOVEN L. RUALOCommissioner of Internal Revenue

baniquedRMO No. 17-97 dated April 1, 1997 was at the time of the saidpayment by the vendee still on its experimental stage and had not yet been widelydisseminated so as to inform the tax-paying public about the repeal of the previousBIR Rulings to the effect that the documentary stamp tax being an excise tax may bepaid at the place where the payor resides, whether he be the vendor or the vendee.