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22 (B); DA-303-2005
Gentlemen :
This refers to your letter dated August 15, 2005 requesting for a ruling on the
tax implications of the Joint Venture Agreement entered into by and among Sta. Isabel
Management & Development Corporation, Trina Management & Development
Corporation, Tona Management & Development Corporation, Angie Management &
Development Corporation, San Bernardino Realty, Inc., Isabelita J. Montinola, Luis J.
Montinola and Trino S. Montinola III, all hereinafter collectively referred to as the
"LANDOWNERS", regarding the real property situated in Bo. Anilao, Lipa City.
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facilities and technical know-how in the development work required by
the LANDOWNERS in the subdivision of the above-described property,
the CONSORTIUM shall undertake the subdivision and development of
the same. Marketing shall be done by both the LANDOWNERS and the
CONSORTIUM in relation to their specific lot shares and, in general,
the management and operation of the subdivision project.
4. The parties further agree to share in the gross saleable area resulting
from this venture by assigning to the parties designated individual lots
comprising the entire subdivision. In this connection, sharing of the lots
will be based solely on the stockholder's ownership in the
CONSORTIUM. The parties shall, after the approval by the
LANDOWNERS of the subdivision plan, agree on the specific lots to be
assigned to each of them based on the principle that the parties shall
equitably share in the prime and non-prime lots.
2. The allocation and distribution of the saleable lots to the parties in the
Joint Venture in accordance with their respective equity contributions as stipulated in
the Agreement is not subject to income tax, withholding tax or capital gains tax, since
the allocation/distribution is without consideration, not in connection with a sale and
constitutes mere return of capital. TAIcaD
This ruling is being issued on the basis of the foregoing facts as represented.
However, if upon investigation, it will be disclosed that the facts are different, then
this ruling shall be considered null and void.
Copyright 2015 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia First Release 2015 4