BIR Ruling

September 1, 1967 Mr. Lorenzo F. Miravite 317 Samanillo Bldg. Escolta, Manila S i r : This refers to your letter dated May 18, 1966 requesting the opinion of this Office on whether or not the donor's and donee's gift taxes paid by your client in 1964 can be recovered upon the subsequent revocation of the donation in 1965, and whether or not any internal revenue tax is due and collectible upon the registration of the deed of revocation of the donation. cdll In reply thereto, I have the honor to inform you that the Commissioner of Internal Revenue may credit or refund taxes erroneously or illegally received, or penalties imposed without authority, pursuant to Section 309 of the Tax Code. While the donor's and donee's gift taxes in this case were legally due and collectible at the time of payment thereof, the subsequent revocation of the donation retroacted to the date when the donation was made which is before the taxes were paid. The taxes became, therefore, erroneously or illegally collected, and a refund thereof may be granted provided a formal claim for refund is made in writing and filed with the Commissioner of Internal Revenue within two years after the payment of the said taxes. The deed of donation as well as the subsequent deed of revocation thereof are not subject to documentary stamp tax. However, the acknowledgment is subject to a thirty (P0.30) centavos documentary stamp tax prescribed under Section 225 of the Tax Code. cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue