BIR Ruling [DA-237-98]

June 15, 1998 BIR RULING [DA-237-98] Cruz-Feliciano Law Offices 3rd Floor, Feliciano Building 7426 Santillan, Makati City Attention: Atty . Myrna Cruz-Feliciano Gentlemen : This refers to your letter dated May 8, 1998 requesting for a ruling as to whether or not the Deed of Extrajudicial Settlement of the Estate of Visitacion Bautista with Donation, executed on May 14, 1996 by the heirs of the deceased, namely: Melencio Estanislao, Cecilio Galura and Agnes S. Bautista in favor of the Local Superior of the Franciscan Sisters of the Sacred Heart, Inc. covering two (2) parcels of land situated at Paraaque, Metro Manila and covered by Transfer Certificates of Title No. (98643) 67983 and (98645) 67984 of the Registry of Deeds of Paraaque is exempt from the payment of donor's tax and documentary stamps. LLphil It is represented that the donee, the Local Superior of the Franciscan Sisters of the Sacred Heart, Inc. is a non-stock, non-profit corporation sole duly organized under the laws of the Philippines with principal office at Paraaque, Metro Manila; that it is actually engaged in religious and charitable and non-profit activities as defined in its Articles of Incorporation, as follows: 1. Engaging in religious and charitable works throughout the Philippines, specifically among the poor and unfortunate in order to promote their spiritual, intellectual and moral lives, character and personality, as well as their physical health and well being; 2. To cooperate and assist in the operation and administration of schools of all types, orphanages, homes for the handicapped, aged and unfortunates, community centers, religious house, hospitals or clinics, novitiates or retreat house; 3. To assist the government in the implementation of programs on socio-economic upliftment, social justice, protection in abandoned, exploited or handicapped children or youth, through establishment, maintenance and support of purely charitable and non-profit projects. and that the tax due on the estate of the late Visitacion Bautista had been paid, as in fact, a Certificate Authorizing Transfer of Properties Subject to Estate Tax was issued by the Bureau of Internal Revenue on July 9, 1996. In reply, please be informed that inasmuch as the donee is a religious institution, the aforementioned donation is exempt from the payment of the 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 gifts shall be used by the donee for administration purposes. The Register of Deeds shall, however, annotate this condition at the back of Transfer Certificate of Title because failure to comply with the said condition shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. Moreover, the aforesaid 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 Code. (BIR Ruling No. DA-195-97 dated April 28, 1997 and 108-94 dated May 30, 1994) 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. aisadc Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group