BIR Ruling [DA-077-99]

February 8, 1999 BIR RULING [DA-077-99] Samahang Katoliko Sa Village East, Inc. Village East Executive Homes Imelda Avenue, Cainta, Rizal Attention: Ms . Angela L . Matutin a President Gentlemen : This refers to your letter dated October 7, 1998 requesting for a ruling as to whether or not the Deed of Donation executed by Antipolo Properties, Inc. and Village East Homeowners Association, Inc. in favor of Samahang Katoliko sa Village East, Inc., with principal office at Village East Executive Homes, Cainta, Rizal, covering parcels of land covered by Transfer Certificates of Title No. 523641 and 525257 of the Registry of Deeds of Rizal, is exempt from the payment of donor's tax and documentary stamp tax. LexLib Documentary evidence submitted disclosed that Antipolo Properties, Inc. (API) is a corporation duly organized and existing under the laws of the Philippines with office located at Agora Complex, N. Domingo Street, San Juan, Metro Manila; that it is the registered owner of parcels of land situated at Village East Executive Homes, Cainta, Rizal, originally covered by Transfer Certificates of Title Nos. 523641 and 525257; that API donates the said properties to Village East Homeowners Association, Inc. (VEHAI), also a non-stock, non-profit corporation duly organized and existing under the laws of the Philippines with office located at VEHAI Clubhouse, Village East Avenue, Village East Executive Homes, Cainta, Rizal; that the parcels of land were classified as parks and playground; that majority of the members of the VEHAI signified their willingness to donate a parcel of land, more particularly Lot 3, Pcs-04-012985, to Samahang Katoliko sa Village East Inc. (SKVEI), likewise a non-stock corporation, solely for the religious purposes of the latter. In reply, please be informed that inasmuch as the donee is a religious corporation, the aforementioned donation is exempt from the payment of the 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 the said gifts shall be used by the donee for administration purposes. The Register of Deeds shall, however, annotate this condition at the back of Transfer Certificate of Title because failure to comply with the said condition shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. Moreover, the aforesaid Deed of Donation is subject to documentary stamp tax of P15.00 imposed under Section 188 of the same Code. (BIR Ruling No. DA195-97 dated April 28, 1997 and 108-94 dated May 30, 1994) 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. cdta Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group