BIR Ruling [DA-408-04]

July 26, 2004 BIR RULING [DA-408-04] Section 101 (A) (3) BIR Ruling No. 108-94 & DA-195-95 Samahang Bagong Buhay Foundation, Inc. SBB Center, San Antonio Village Antipolo City Attention: Fr. Leo Schmitt, SVD Executive Director Gentlemen : This refers to your letter dated July 8, 2004 requesting for exemption from the payment of donor's tax on the transfer of two (2) lots by the foundation to The Society of the Divine Word. It is represented that Samahang Bagong Buhay Foundation started in 1987 two (2) relocation communities, Janssenville and Simona, located in Cainta and Taytay, Rizal; that since October 30, 2003, Janssenville has been created as a parish/shrine in honor of Saint Arnold Janssen; that the legal personality of the parish is The Society of the Divine Word (SVD); and that in order to meet the requirements of Canon Law, the foundation decided to donate two (2) lots covered by Transfer Certificate of Title (TCT) No. 609065 and TCT No. 609001 with an area of 4,500 sq.m. and 1,546 sq.m., respectively, as church site and educational, cultural and spiritual center. 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 said gift shall be used by the donee for administration purposes. The Register of Deeds shall, however, annotate this condition at the back of the 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, as amended, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997 ( BIR Ruling No. 108-94 dated May 30, 1997 and BIR Ruling No. DA-195-97 dated April 28, 1997 ). 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 as null and void. TCDcSE Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service