BIR Ruling

September 29, 1970 Mr. Filemon M. Mendoza Administrative Officer Office of the City Legal Officer Caloocan City S i r : This is in reply to your letter dated September 23, 1970 requesting exemption from the payment of the donor's and donee's gift taxes of the donation of certain parcels of land situated in University Hills Subdivision, Caloocan City, by Max T. Dalupan and Company in favor of the City of Caloocan. It appears that a Deed of Donation was executed on September 13, 1965 whereby, subject to certain conditions expressly provided therein, Max T. Dalupan & Co., a general co-partnership duly registered with the Securities and Exchange Commission with principal office located at Rooms 316 and 319 Madrigal Building, Escolta, Manila, and represented by its managing partner Maximiano T. Dalupan ceded, transferred and conveyed by way of donation in favor of the City of Caloocan, a chartered city endowed with the faculty of municipal corporations, created under Republic Act No. 3278, organized and existing under and by virtue of the laws of the Philippines, with postal address at Caloocan City, represented by its Mayor, Honorable Macario B. Asistio, acting upon resolution of its council, certain parcels of land with a total of 36,159 square meters, more or less, and covered by Transfer Certificates of Title Nos. 7778, 1518, 750 and 8042. The said lands will be utilized for park and/or school site, street and alley purposes. cdta Pertinent portions of Section 12 of the Tax Code are as follows: "Sec. 112. Exemption of certain gifts . The following gifts or donations shall be exempt from the tax provided for in this Chapter: (a) In the case of gifts made by a resident: xxx xxx xxx (3) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government. xxx xxx xxx In view thereof, and considering that the donated lands will be used for such purposes as will redound to the benefit of the people in general, and the residents of the City of Caloocan in particular, this Office is of the opinion and so holds that the aforesaid donation is not subject to the donor's and donee's gift taxes. cd Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue