BIR Ruling [DA-271-98]

June 26, 1998 BIR RULING [DA-271-98] Sacred Heart Mini-Pastoral Council Brookside, Cainta, Rizal Attention: Ms . Ma . Lourdes P . Hernandez Chairperson Gentlemen : This refers to your letter dated June 23, 1998 requesting for a ruling that the donation of a parcel of land by the Brookside Residents Association, Inc. a non-stock, non-profit organization, in favor of The Roman Catholic Bishop of Antipolo, Inc., a corporation sole for the church site of the latter, is exempt from the donor's tax and documentary stamp tax. It appears that the Brookside Homeowners Association, Inc. is desirous to build a church for their religious fervor within their subdivision; that it is the owner of an open space, situated in the Brookside Hills Subdivision and covered by TCT No. 531002 of the Registry of Deeds for the Province of Rizal, which open space is the proposed site where the church shall be erected; and that it executed a Deed of Donation in favor of The Roman Catholic Bishop of Antipolo, Inc. covering said property. In reply, please be informed that pursuant to Section 101(A)(3) of the Tax Code of 1997, gifts made in favor of a religious institution shall be exempt from the donor's tax provided that not more than thirty per centum of said gifts shall be used by such donee for administration purposes. Accordingly, since the donee, is a religious institution within the contemplation of Section 101(A)(3) of the Tax Code of 1997, the aforesaid donation is exempt from donor's tax provided that not more than thirty per centum (30%) of said donation shall be used by the donee for administration purposes. Moreover, the Deed of Donation is not subject to the documentary stamp tax as prescribed by Section 196 of the Tax Code of 1997 since the transfer is gratuitous. (Section 161, Revenue Regulations No. 26 of the Revised Documentary Stamp Tax Regulations) However, the acknowledgment of the Deed of Donation before a notary public is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the same Code. (BIR Ruling No. 065-92 dated February 26, 1992) This ruling is issued on the basis of the foregoing representations. However, if upon investigation, it will be disclosed that the facts are different from that as represented, then this ruling shall be considered null and void. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)