BIR Ruling [DA-329-05]

July 27, 2005 BIR RULING [DA-329-05] Section 101 (A) (3); S30-056-2001 Atty. Raquel R. Tantoco-Pineda The Asian Mansion I, 109 De La Rosa St., Legaspi Village, Makati City M a d a m : This refers to your letter dated April 11, 2005 requesting in behalf of your client, the Sisters of St. Paul of Charters for exemption from the payment of donor's tax relative to the donation in favor of the Sisters of St. Paul of Chartres. It appears that you write in behalf of the Sisters of St. Paul of Chartres , a non-stock, non-profit corporation duly organized and existing under the laws of the Philippines; that the transfer shall be without monetary consideration and that not more than 30% of the gifts shall be used by such donee for administration purposes. 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 said gifts shall be used by the donee for administration purposes. ICAcaH 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. Finally, if the donor is a VAT registered person and the donation is an ordinary asset, the input VAT attributed to the VAT portion of the cost of the donation should be deducted from the accumulated input VAT of the donor. If the donor is not a VAT registered person, the donation is exempt from VAT. 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service