BIR Ruling [DA-063-97]

February 7, 1997 BIR RULING [DA-063-97] Mayor Bayani F. Fernando Municipal Mayor Municipality of Marikina S i r : This refers to your letter dated August 21, 1996, requesting exemption from the payment of donor's tax on the real property donated by Solid Homes, Inc. in favor of the Municipality of Marikina. Documentary evidence submitted shows that on July 27, 1995, Solid Homes, Inc. executed a Deed of Donation in favor of the Municipality of Marikina involving an open space in Loyola Grand Villas, a subdivision owned and developed by the donor; and that said open space is situated in Puerto Rico St., Loyola Grand Villas, Marikina with an area of 13,370 sq. meters and covered by TCT No. N-74558. In reply, please be informed that Section 94(a)(2) of the Tax Code, as amended provides as follows: "SEC. 94. 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 (2) 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 ; Since the donee is a political subdivision of the National Government, the donation in its favor is exempt from the payment of the donor's tax. (BIR Ruling No. 056-86 dated May 08, 1986) cdlex Very truly yours, (SGD.) ALICIA L. TOMACRUZ Head Revenue Executive Asst . (Legal Service)