BIR Ruling [DA-142-02]

August 29, 2002 BIR RULING [DA-142-02] 101 (A) (3) S30-056-2001 Quiason Makalintal Barot Torres & Ibarra 21st Floor Robinsons-Equitable Tower 4 ADB Ave. cor. Poveda Street Ortigas Center, Pasig City Attention: Atty. Benedict R. Tugonon Gentlemen : This refers to your letter dated April 20, 2002 requesting exemption from the payment of donor's tax relative to the donation of four (4) parcels of land made by International Institute of Rural Reconstruction, Inc. (IIRRI) in favor of Philippine Rural Reconstruction Movement, Inc., (PRRM) by virtue of a Deed of Donation executed on May 26, 1975. It appears that IIRRI is an international civic, non-profit foundation duly established in accordance with the laws of the State of Delaware, U.S.A.; that it is the owner of four (4) parcels of land situated in Dasmarias, Cavite covered by Transfer Certificates of Title (TCT) Nos. T-5055, T-5056, T-5057 and a parcel of unregistered land located at Barrio Biga, Silang, Cavite; that PRRM on the other hand is a non-stock, non-profit educational, civic, charitable and social welfare organization without stockholders, paying no dividends, devoting all its income to the accomplishment and promotion of the purposes enumerated in its articles of incorporation and organized for the purpose of improving the quality of life and living conditions in the rural areas of the Philippines and it is duly registered as a donee institution under Batas Pambansa Blg. 45, amending Section 30(h) of the Tax Code, as implemented by BIR-NEDA Regulations No. 1-81; that a Deed of Donation of Land was executed on May 26, 1975, whereby IIRRI donated the aforesaid real properties, excluding the buildings and other improvements thereon in favor of PRRM; and that such donation was made for the furtherance of the goals and objectives of the donee. In reply, please be informed that inasmuch as the donee is an educational, charitable and social welfare organization, 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 by the donee for administration purposes. Moreover, the Deed of Donation is not 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 foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. EcHaAC Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service