BIR Ruling [DA-408-05]

October 3, 2005 BIR RULING [DA-408-05] Section 101 (A) (3); BIR Ruling No. DA-028-98 Atty. Ruben Joel A. Puertollano 9-C Gen. Lim Street Heroes Hills, Brgy. Sta. Cruz Quezon City S i r : This refers to your letter dated September 20, 2005 requesting for an exemption from payment of donor's tax on the transfer of that parcel of land together with all the buildings and improvements found thereon situated in Poblacion, San Jacinto, Masbate. As represented, on April 15, 2005, Liceo de San Jacinto, Inc.,a stock and profit corporation with principal office at San Jacinto, Masbate and whose corporate life expired on March 30, 2003, executed a Deed of Donation over a parcel of land in favor of Liceo De San Jacinto Foundation, Inc.,a non-stock, nonprofit educational institution with principal office at San Jacinto, Masbate and registered with the Securities and Exchange Commission on March 7, 2003. In reply, please be informed that inasmuch as the donee is an educational institution, the aforementioned donation is exempt from 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 thirty percent (30%) of said gift shall be used for administration purposes. Section 185 of Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulations, implementing Title VII of the Tax Code, provides that conveyances of realties not in connection with a sale, to trustees or other persons without consideration are not taxable. Accordingly, the 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. DA-28-98 dated January 29, 1998). 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. cEATSI Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service