BIR Ruling [DA-507-99]

September 3, 1999 BIR RULING [DA-507-99] Alba Romeo & Co. Certified Public Accountants 7/F Don Chua Lamko Bldg. H.V. Dela Costa Street Salcedo Village, Makati City Attention: Mr . Alba Romeo Gentlemen : This refers to your letter dated March 9, 1999 requesting for an exemption from the payment of donor's tax on the donation of two (2) parcels of land with improvements thereon by St. Scholastica's College, Inc. in favor of St. Scholastica's Center of Spirituality, Inc. It appears that St. Scholastica's College, Inc. is a non-stock, non-profit domestic corporation duly registered with the Securities and Exchange Commission on October 17, 1990 under SEC Registration No. 536; that St. Scholastica's College, Inc. is the registered owner of two (2) parcels of land with buildings and improvements thereon covered by Transfer Certificate of Title Nos. T-26498 and T-26497 issued by the Registry of Deeds of Tagaytay City; that St. Scholastica's Center for Spirituality, Inc. is a non-stock, non-profit domestic corporation duly registered with the Securities and Exchange Commission on October 7, 1998 under SEC Registration No. A1998-15083; that the main objective of the said corporation is to provide opportunities for retreats and recollections which would meet spiritual needs of groups in search of integration enhancement and renewal; that in the event that the donee can no longer use it for such purposes, the properties donated, including any improvements the donee shall have made thereon, shall revert automatically to the donor. In reply, please be informed that inasmuch as the donee is a religious organization, 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. The Register of Deeds shall, however, annotate this condition at the back of 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 Deed of Donation executed for the purpose is not subject to documentary stamp tax. However, the 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) 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)