BIR Ruling [DA-212-02]

November 21, 2002 BIR RULING [DA-212-02] 101 (A) (3) S30-056-2001 Salva Arrieta Salva Bautista Salva Building, 483 Barcelona Street, San Nicolas, Manila Attention: Atty. Antonio C.O. Salva Counsel Gentlemen : This refers to your letter dated September 4, 2002 requesting for exemption from the payment of donor's tax relative to the donation of a parcel of land by Chinese Buddhist Association of the Philippines in favor of Seng Guan Buddhist Temple Inc by virtue of a Deed of Assignment executed on October 11, 2002. It appears that the donor and the donee corporations are operated for charitable purposes and to propagate and practice Buddhism in the Philippines; that all the members of the board of directors of the donor corporation are also the members and incorporators of the donee corporation; that the donor's corporate term expired on May 1986 without any amendment having been filed, thus effectively dissolving the donor corporation; that Section 94(3) of the New Corporation Code of the Philippines mandates that assets of religious corporations shall be transferred or conveyed to corporations engaged in activities in the Philippines substantially similar to those of the dissolving corporation; and that as a non-stock, non-profit corporation, the members of the board of directors of the donee corporation do not receive any form of dividend whether in cash or otherwise. In reply, please be informed that inasmuch as the donee is a religious 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 the 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service