San Jose del Monte City Water District

February 14, 2008 BIR RULING [DA-095-08] 101 (A) (2); DA-618-2004 San Jose del Monte City Water District Road 1, Brgy. Minuyan City of San Jose del Monte Attention: Engr. Loreto G. Limcolioc General Manager Gentlemen : This refers to your letter dated June 21, 2006 requesting exemption on behalf of Stateland, Inc. (formerly Central Land, Inc.) from the payment of donor's tax on the latter's donation of a lot and water distribution system facilities to San Jose del Monte Water District. Documents submitted shows that Central Land, Inc. is a domestic corporation primarily engaged in real estate development and is the developer of Diamond Crest Village, San Jose del Monte City, Bulacan; that it is the owner of a parcel of land in the said village with an area of 412 sq.m. covered by Transfer Certificate of Title No. 295551 (M) for the Registry of Deeds for Meycauayan, Bulacan, and also water distribution system facilities consisting of the following: 1) deep well; 2) submersible pump, motor and accessories; 3) elevated steel water tank; 4) PVC transmission and distribution lines; 5) Individual house service connections of 3/4' diameter PB tubes and fittings; 6) fire hydrants; 7) pump house, control panel and supply room; 8) private electric pole, service lines and electric meter; that San Jose del Monte City Water District is the franchise holder for water service in the City of San Jose del Monte, Bulacan, as authorized under Presidential Decree No. 198, and the subject subdivision is within its franchise area; that on February 27, 2003, both parties entered into a Memorandum of Agreement whereby Stateland, Inc. proposed to transfer and convey unto San Jose del Monte City Water District ownership of the aforestated parcel of land and the water distribution facilities; and that on April 13, 2004, the parties executed between themselves a Deed of Donation. In reply, please be informed that inasmuch as the donee is an entity created by the government, the aforesaid donation is exempt from the payment of donor's tax pursuant to Section 101 (A) (2) of the Tax Code of 1997. CEDHTa Moreover, the Deed of Donation will not be subject to the 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 Tax Code. This ruling is being issued on the basis of the forgoing 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service