Summary
RMC No. 49-2013 circularizes the revocation of Certification Ruling No. SN 391-2009, which covered an exchange of real properties for shares between Spouses Abad and Abad Royal Estate, Inc.
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Key points
- What the ruling covered. The ruling concerned an exchange of real properties for shares of stock, with the spouses as transferors and the corporation as transferee. The application sought tax exemption under Section 40(C)(2) of the Tax Code of 1997.
- Facts found on investigation. The Deeds of Assignment were signed in October 2009 by an attorney-in-fact under Special Powers of Attorney dated June 25, 2006. The Special Investigation Division of Revenue Region No. 7 found that one spouse died on February 8, 1986 and the other on December 21, 2008.
- Ground for revocation. The application contained factual misrepresentations that were crucial to the validity of the transaction and the ruling. The death of a principal extinguished the attorney-in-fact’s authority under the Special Powers of Attorney.
- Retroactive effect. The BIR revokes the ruling. The revocation is retroactive, because the cause falls among the cases where retroactive application is allowed despite the prejudicial effect on the taxpayer.
Who is affected
- Spouses Martiniano G. Abad and Remedios M. Abad
- Abad Royal Estate, Inc.
Deadlines and effectivity
- Revocation is retroactive
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.