BIR RULING [DA-270-04]

17 May 2004

Dispositive portion:

Considering that the registered lots classified in IPI's books as investment in real estate are
idle, unproductive and unimproved real properties since the time of acquisition, and do
not fall under any of the assets enumerated under Sections 39(A)(1) of the Tax Code of 1997
and 2(b) of Revenue Regulations No. 7-2003, the same should be properly classified as
capital assets for tax purposes.

Accordingly, we hereby confirm your opinion that the sale of IPI's registered lots which are
classified as 'investment properties' in its books and considered as capital assets is:

i. subject to capital gains tax (CGT) of 6% pursuant to Section 27(D)(5) of the Tax code
of 1997;

ii. subject to DST at the rate of P15,00 for each P1,000.00 or fractional part thereof in
excess of P1,000.00, or 1.5% of the consideration or fair market value of the
properties, whichever is higher, pursuant to Section 196 of the Tax Code; and

iii. exempt from 10% VAT, the properties not being primarily held and offered for
sale or lease to customers in the ordinary course of IPI's trade or business, as
provided under Section 109(w) of the Tax Code of 1997.

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.