BIR Ruling [DA-058-04]

February 9, 2004 BIR RULING [DA-058-04] 101 (A) ((3) 045-2000 Belo Gozon Parel Asuncion & Lucila Attorneys-at-Law 15th Floor, Sagittarius Condominium H.V. dela Costa Street, Salcedo Village Makati City Attention: Atty. Roberto O. Pare l Gentlemen : This refers to your letter dated March 10, 2000 and May 17, 2001 stating that a donor has come out willing to donate a real property to the Merkaba Foundation, Inc. for the purpose of putting up a retreat house and another donor is about to donate a real property to the Redemptoris Mater Missionary Seminary, Archdiocese of Manila, Inc. for the purpose of putting up a seminary; that pending the issuance of the Certificate of Tax Exemption and Accreditation with the Philippine Council for NGO Certification, you now request if Merkaba Foundation, Inc. and Redemptoris Mater Missionary Seminary, Archdiocese of Manila, Inc. can accept the donations of real properties without having to pay income tax and donor's tax, as well as entitling the donors to a tax deduction; and that you agreed that these taxes will have to be paid if the application for tax exemption and registration as a donee institution will be disapproved. In reply thereto, please be informed that pursuant to Section 101(A)(3) of the Tax Code of 1997, the proposed donations to Merkaba Foundation, Inc. and Redemptoris Mater Missionary Seminary, Archdiocese of Manila, Inc. are exempt from the payment of donor's tax, subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. However, it is the opinion of this Office that Merkaba Foundation, Inc. and Redemptoris Mater Missionary Seminary, Archdiocese of Manila, Inc. are required to first secure accreditation as donee institutions from the Philippine Council for NGO Certification (PCNC),6th Floor SCC Bldg.,CFA-MA Compound, 4427 Interior Old Sta. Mesa, Manila, in order that donations made to them by natural and juridical persons may be treated as fully deductible for income tax purposes. (BIR Ruling No. 045-2000 dated May 15, 2000) 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. ADaSEH Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service