BIR Ruling [DA-174-04]

April 6, 2004 BIR RULING [DA-174-04] 101 (A) (2) Office of the Sangguniang Panlungsod City of Las Pias Attention: Coun. Berlin R. Dela Cruz Chairman, Committee or Laws Gentlemen : This refers to your letter dated June 23, 2003 requesting for a confirmation of your opinion that the donation by V.A.A. Builders Corporation of the open space reserved for parks and playgrounds to Veraville I Homeowners Association is exempt from the payment of donor's tax pursuant to Presidential Decree No. 1216. It is represented that V.A.A. Builders Corporation is the developer of Veraville Homes 1, Almanza Uno, City of Las Pias; that it is the registered owner of the open spaces of the said subdivision project; and that said corporation desires to donate the open space reserved for parks and playgrounds to the Veraville I Homeowners Association upon the request of the latter. In reply, please be informed that Section 101(A)(2) of The Tax Code of 1997 provides that: SEC. 101. Exemption of Certain Gifts . The following gifts or donations shall be exempt from the tax provided for in this Chapter: xxx xxx xxx (2) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government." Moreover, in the instant case, the donation will be made in favor of the Veraville I Homeowners Association. Thus, the same will not be covered by the exemption privileges provided for under Section 101(A)(2) of the said Tax Code. Therefore, the donation by V.A.A. Builders Corporation consisting of the open space reserved for parks and playgrounds to Veraville I Homeowners Association is subject to the donor's tax imposed under Section 98 of the Tax Code of 1997. EASIHa This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it shall 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.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Enforcement Group