BIR Ruling [DA-307-03]

September 22, 2003 BIR RULING [DA-307-03] 101 (A) (3) DA-084-03 Cadiz Carag & De Mesa Law Offices Suite 2602, 26th Floor, The Atlanta Centre No. 31 Annapolis Street, Greenhills 1500 San Juan, Metro Manila Attention: Attys. Othelo C. Carag and Anna Liza M. Ang-Co Gentlemen : This refers to your letter dated September 5, 2003, requesting on behalf of your client Harris Memorial College, Inc. (formerly Harris Memorial College Development Center for Women, Inc.), hereinafter referred to as "Harris", for a confirmation of your opinion that donation of property, is exempt from donor's tax prescribed under Section 98 of the Tax Code of 1997, in view of the provisions of Section 101 of the same Tax Code. It is represented that Harris is a non-stock, non-profit educational institution duly recognized by the Department of Education and Commission on Higher Learning to conduct and operate kindergarten, elementary and high school classes; that it is also authorized to conduct and operate a Bachelor of Arts Course, Bachelor in Kindergarten Education, Bachelor of Elementary Education Course and Bachelor of Secondary Education Course, covered by Government Recognition Nos. 67 and 68, Series of 1971, and 161 and 162, Series of 1998, respectively; that it is duly registered with the Securities and Exchange Commission under SEC Registration No. PW-767; that the purposes for which Harris is incorporated are to prepare persons especially women, for active participation in church and national development particularly in the field of Christian education, and mission work and to grant undergraduate and graduate degrees in Christian education and other fields or studies related to the total human development in accordance with the approval of the appropriate government agency. You are now requesting for a confirmation of your opinion that Harris is exempt from the following: "1. Donation by Lingap Kabataan Incorporated to Harris of the former's co-ownership rights in the real property located at Malolos, Bulacan, covered by Transfer Certificate of Title ("TCT") No. T-52010; CTHDcS 2. Proposed donation by RHL Properties & Development Corporation (RHL) to Harris over 50 square meters in a non-prime section of the commercial center building known as Times Plaza, located at corner United Nations and Taft Avenue, Ermita, Manila covered by TCT Nos. 118180 and 118181; 3. Proposed donation by RHL to Harris over the leasehold rights over a contiguous area of the office tower building known as Times Plaza equivalent to eight and one-half (8 ) percent of the total area of the office tower building located at United Nations Avenue, Manila covered by TCT Nos. 118180 and 118181; 4. Proposed transfer by RHL to Harris of the entire commercial center and office tower buildings located at United Nations Avenue, Manila covered by TCT Nos. 118180 and 118181 on 02 November 2045." In reply, please be informed that inasmuch as the donee is an educational institution, the aforementioned donations are exempt from the payment of donor's tax pursuant to Section 101(A)(3) of the Tax Code of 1997 and Section 25 of B.P. Blg. 232, as amended by R.A. 7798, otherwise known as the "Education Act of 1982", subject to the condition that not more than 30% of said gift shall be used for administration purposes (BIR Ruling Nos. [DA-025-03] dated January 30, 2003, [DA-132-02] dated August 16, 2002, [DA-084-03] dated March 19, 2003). Moreover, the aforesaid Deeds of Donation are not subject to 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 Nos. DA-18-98 dated January 29, 1998, [DA-025-03] dated January 30, 2003, [DA-132-02] dated August 16, 2002, [DA-084-03] dated March 19, 2003). cSICHD 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service