BIR Ruling [DA-143-02]

August 30, 2002 BIR RULING [DA-143-02] 101 (A) (3) DA-481-98 The Maharlika Charity Foundation, Inc. Maharlika Center Bldg., J.P. Cabaguio Avenue 8000 Davao City, Philippines Attention: Mr. Rizal D. Aportadera, MD Gentlemen : This refers to your letter dated June 27, 2002 requesting exemption from the payment of taxes that may be imposed on the donation made by the International Foundation for Education and Health of Tadsworth Terr., Lake Mary Fl. 32746, to Maharlika Charity Foundation, Inc., consisting of one (1) used vehicle more particularly described as follows: One (1) unit 1994 model Nissan Quest Van with Vehicle ID NO. 4N2DN11WORD802112. In reply, please be informed that inasmuch as the donee is a charitable institution, donations received by the same 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 purpose. However, the notarial 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-481-98 dated November 9, 1998 ) Regarding VAT exemption, please be informed that the same cannot be granted for lack of legal basis. Section 105 of the Tax Code of 1997 provides that any person who imports goods shall be subject to the value-added tax imposed under Section 107(A) of the same Code. Accordingly, your importation of the said vehicle shall be subject to 10% VAT based on the total value used by the Bureau of Customs in determining tariff fund customs duties, plus customs duties, excise taxes, if any, and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service