BIR Ruling

March 15, 1967 Mr. T. Calasanz Secretary General The Philippine National Red Cross National Headquarters 860 United Nations Avenue Manila S i r : This refers to your letter dated February 15, 1967 requesting information as to whether or not the Philippine National Red Cross is subject to inheritance tax on the $5,000.00 bequest which it will receive from the estate of the late Leo H. Martin, a non-resident alien. cdll In reply thereto, I have the honor to inform you that in allowing as deductible under Section 89 (a)(3) and (b)(3), the amount of all bequests, legacies, devises, or transfers made to or for the use of the Government of the Philippines, or any political subdivision thereof, for exclusively public purposes, the law in effect, relieves a decedent's estate from tax on property so transferred for the purpose of encouraging and promoting bequests or similar transfers for altruistic objects. (See also Commissioner of Internal Revenue vs. Pupin's Estate et al. 107F (2d) 745; Kneerschild vs. Commissioner of Internal Revenue, 97F (2d)(213). Accordingly, not being subject to the burden of its own tax, the Government or any political subdivision thereof as the recipient of a transfer for exclusively public purpose is likewise exempt from the corresponding inheritance tax. The Philippine National Red Cross is a public corporation created "to assist the Republic of the Philippines in discharging the obligations set forth in the Geneva Red Cross Convention and to perform such other duties as are incumbent upon the National Red Cross Society." It is "a charitable organization operated as an agency of the Republic of the Philippines." (Republic Act No. 95; see also Opinion No. 42, s. of 1949, Sec. of Justice). In view thereof, and considering that it is a government agency performing governmental functions, this Office believes and so holds that the Philippine National Red Cross is not subject to inheritance tax on the abovementioned bequest provided that the same is received and used in the furtherance of its objectives. llcd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue