BIR Ruling [DA-107-05]

April 4, 2005 BIR RULING [DA-107-05] 101 (A) (3) 551-2004 Lorraine Technical School, Inc. Jose N. Layug Sr. St., Sto Nio Guagua, Pampanga Attention: Ms. Loreta L. Razon Donor Gentlemen : This refers to your letter dated December 20, 2004 requesting exemption from the payment of donor's tax on the donation of a parcel of land by Ms. Loreta L. Razon to Lorraine Technical School, Inc. It appears that Lorraine Technical School, Inc . is a non-stock, non-profit educational institution duly organized and existing under and by virtue of the laws of the Philippines, under the supervision of the Technical Education and Skills Development Authority (TESDA), Department of Labor and Employment; that the school offers technical, vocational and other short term courses at very affordable fees in order to provide an alternative opportunity to the youths who cannot afford the high cost of collegiate education; that during its four decades of operation, the school has graduated thousand of youths from various trade areas it offers; that majority of the graduates have found gainful employment, both locally and abroad; that to further serve the purpose for which the school was established, you have maintained linkages with non-government organizations for sponsorship of scholarship programs for the benefit of poor but deserving high school graduates of public schools who could not afford post secondary education; that this is on top of your in-house program under the "Jose N. Layug Sr. Memorial Scholarship Program" which has been extending educational assistance to our less fortunate countrymen; that Ms. Loreta L. Razon is the absolute and registered owner of a parcel of land situated in San Fernando City, Pampanga, covered by Original Certificate of Title No. P-2375, issued by Registry of Deeds for the City of Olongapo, containing an area of four hundred sixty two (462) square meters; and that for and in consideration of the love and affection of Ms. Loreta L. Razon has for the school to attain its educational purposes and as an act of liberality and generosity, she voluntarily and freely gives, transfers and conveys by way of donation unto the said school, its executors, administrators and assigns, all rights, titles and interests which she has in the above-described real property, together with all the buildings and improvements found therein, free from all liens, encumbrances and charges whatsoever. In reply, please be informed that inasmuch as the donee is a non-stock, non-profit educational institution, the aforesaid 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 by the donee for administration purposes. ASDCaI Moreover, the aforesaid Deed of Donation is not subject to the documentary stamp tax prescribed under Section 196 of the Tax Code of 1997. However, the acknowledgment on said deed is subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-551-2004 dated November 05, 2004) 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, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group