BIR Ruling [DA-423-05]

October 11, 2005 BIR RULING [DA-423-05] 101 (A) (3); DA-481-98 Cayaga, Zuiga & Angel Second Floor, One Corporate, Plaza 845 Pasay Road, Legaspi Village 1229 Makati City Attention : Atty. Aureen P. Soriano Gentlemen : This refers to your letter dated May 23, 2005 requesting, on behalf of your client Unlad Resources Development Corporation (Unlad), exemption from the payment of taxes that may be imposed on its donation in favor of Philippine Women's College of Davao, Inc. (PWC-Davao) of a parcel of land more particularly described as follows: "A Parcel of Land (Lot 1, Pcs-11-00852 being a portion of Lots A & B, Psd-33457 Amd), situated in the Barrio of Matina, City of Davao, Island of Mindanao, Bounded on the NE., along lines 5-6-7 by Road Lot 2, Psd-27443; on the SE., & SW., along lines 7-1-2 by Lot 2 of the consolidation-subdivision plan; on the NW., along lines 2-3-4-5 by Road Lot 2, Psd-27443. Beginning at a point marked "1" on plan being S. 46 deg. 46'W., 1662.3m. from Mon. No. 9, Davao Townsite Subdivision . . . Containing an area of THIRTY THOUSAND (30,000) SQUARE METERS, more or less. . . ." It is represented that Unlad is a corporation organized with the purpose, "(T)o own, acquire, hold, buy, sell, exchange, lease, mortgage, develop, manage, operate and otherwise generally deal in real property, improved and unimproved, including buildings of every class and description . . ."; that PWC-Davao is a non-stock corporation engaged, among other, in the establishment and conduct of a school or schools and acquisition of properties incident to the purposes for which the corporation is formed; and that Unlad donated in favor of PWC-Davao one of its assets, a parcel of land containing an area of three (3) hectares, more or less, situated in Barrio Matina, Davao City, covered by TCT No. T-129544, together with the school buildings presently being used by PWU-Davao. In reply, please be informed that inasmuch as the donee is an educational institution, the aforesaid 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 gift shall be used by the donee for administration purposes. aSTAHD Moreover, the Deed of Donation executed for the purpose is not subject to the documentary stamp tax. However, the notarial acknowledgment on said deed is subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-481-98 dated November 9, 1998) Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service