Diocese of Virac

June 4, 2008 BIR RULING [DA-340-08] Section 101 (A) (3) & (B) (2) Diocese of Virac Chancery Office Virac, Catanduanes Attention: Bishop Manolo A. de los Santos, D.D. Reverend Father : This refers to your letter dated April 10, 2008 requesting, in effect, for a ruling that any person who gives donations to the Diocese of Virac shall be exempt from payment of donor's tax. IcaHCS As represented, The Roman Catholic Bishop Diocese of Virac, Inc. ("Diocese of Virac" for brevity) is a religious corporation sole registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 58141 issued on October 2, 1974. The purpose for which it was organized is to administer the temporalities and manage the estate and properties of the Roman Catholic Church in the province of Catanduanes. It is being represented by the Bishop of Virac as provided for in Canon No. 393 of the Code of Canon Law, ( i.e. , in all juridical transactions of the diocese, the diocesan Bishop acts in the person of the diocese) and as approved by the SEC on November 30, 2004 in accordance with the provision of Section 114 of Batas Pambansa Blg. 68 otherwise known as the Corporation Code of the Philippines. In reply, please be informed that gifts in favor of the Diocese of Virac are exempt from payment of the donor's tax pursuant to Section 101 (A) (3) and (B) (2) of the Tax Code of 1997, as amended, subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. EIaDHS Likewise, any donation of real property in favor of the Diocese of Virac is not subject to capital gains tax. The Deed of Donation is not subject to the documentary stamp tax under Section 196 of the Tax Code of 1997 but only to the documentary stamp tax of PhP15.00 on certification under Section 188 of the same Code. However, if the same property acquired by gift is subsequently conveyed by way of sale or exchange, the transaction will be subject to corporate income tax on the gain realized which is determined by deducting from the gross selling price the historical cost or the adjusted basis thereof, as it would be in the hands of the donor, pursuant to Section 27 in relation to Section 101, both of the Tax Code of 1997, as amended, and consequently to the creditable expanded withholding tax under Revenue Regulations No. 2.57.2 of Revenue Regulations No. 2-98, as amended. If it is donated to a non-exempt donee, the donor shall be liable for donor's tax pursuant to Section 98 in relation to Section 91 (B) of the same Tax Code. ESIcaC Please be guided accordingly. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service