BIR Ruling [DA-072-01]

April 27, 2001 BIR RULING [DA-072-01] 101 (A) (3) DA-28-98 Hospicio de San Jose Ayala Bridge Quiapo 1001, Manila Attention: Sister Nelia Pacia, D . C . Sister Superior Gentlemen : This refers to your letter dated October 25, 2000 requesting for an exemption from the payment of donor's tax prescribed under Section 101 (A)(3) of the Tax Code of 1997. It is represented that Ona Real Estate Corporation (Ona Corp.) is the owner in fee simple of a certain parcel of land situated in Quezon City and more particularly described under Transfer Certificate of Title No. 89999 of the Register of Deeds for Quezon City; that for and in consideration of the educational, charitable, religious, cultural and social welfare activities of Hospicio de San Jose (Hospicio), Ona Corp. executed a Deed of Donation of Real Property in favor of the latter; that the subject property is located at Brgy. Bagong Silang, Quezon City and has an area of Ten Thousand Nine Hundred Eighty One (10,981) square meters; and that Hospicio is religious congregation duly organized and existing under and by virtue of the laws of the Philippines as a Corporation sole for the following purposes: "To prosecute the purposes for which the entity now known as "Hospicio de San Jose" was established, which are purely charitable, benevolent and religious, and not for financial gain or profit, and to this end 1. To provide temporary or continuing residential group-care services for the physical, intellectual, social and spiritual well-being of abandoned, orphaned, neglected, handicapped or indigent children; 2. To provide a Christian education to all the children served by the institution; 3. To assume care, custody, protection, maintenance and placement to abandoned and orphaned children prior to adoption, guardianship or foster care; 4. To provide temporary or continuing shelter and care to elderly people, especially, the needy; 5 To serve as a community center for indigent families needing multi-services such as social service, health, vocational training, employment and material assistance which promote total human development; 6. To receive donations, endowments and other financial/material assistance and to acquire, hold, mortgage, convey and otherwise dispose of all kinds of property, real and personal, stocks, bonds, securities and other assets, for the maintenance of the institutions and its programs of services; 7. To perform such other acts as may be necessary, convenient or incidental to accomplish the objectives for which it has been organized." In reply, please be informed that inasmuch as the donee is a religious institution, the aforementioned donation is exempt from the payment of donor's tax pursuant to Section 101 (A)(3) of the Tax Code of 1997, subject to the condition that not more than 30% of said gift shall be used for administration purposes, Provided, however, that all the requirements of Revenue Regulations No. 13-98 are complied with. Moreover, the aforesaid Deed of Donation is not subject to documentary stamp tax prescribed under Section 196 of the Tax Code of 1997, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Code. (BIR Ruling No. DA-28-98 dated January 29, 1998). 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Deputy Commissioner Legal and Inspection Group