BIR Ruling [DA-531-06]

September 4, 2006 BIR RULING [DA-531-06] 101 (A) (3); S-30-006-02 Atty. Erlinda A.I. Espiritu M. Adriatico Street Calapan, Oriental Mindoro M a d a m : This refers to your letter dated July 31, 2006 requesting exemption from the payment of donor's tax on the donation of two (2) parcels of land from the Estate of Lilia L. San Agustin to Doa Lilia L. San Agustin Foundation, Inc. It appears that the Estate of Doa Lilia L. San Agustin is the registered owner of two (2) parcels of land situated in the Municipality of Calapan, Province of Oriental Mindoro, consisting an area of 49,495 and 457 square meters covered by Transfer Certificate of Title Nos. T-67200 and T-58584, respectively, issued by the Register of Deeds for the Province of Mindoro Oriental; that Doa Lilia L. San Agustin Foundation, Inc. is a non-stock, non-profit charitable corporation duly registered with the Securities and Exchange Commission under SEC Registration No. CN200610071 dated June 27, 2006; that Doa Lilia L. San Agustin Foundation, Inc. undertakes to solely put the above described properties with all the buildings and improvements thereon to productive charitable, religious and civic use for the benefit of the beneficiaries of its charitable projects and shall not use the said properties for other use other than for the attainment and furtherance of its purposes as stated in its Article of Incorporation; that the Estate of Doa Lilia L. San Agustin cannot avail of deduction for purposes of computing taxable income under Revenue Regulations No. 13-98 because the said Foundation is not yet qualified to apply for accreditation not having been in operation for at least one (1) year as required under the policy/Rules and Procedures of the Philippine Council for NGO Certification (PCNC); and that it may, however, qualify for exemption from payment of donor's tax. In reply, please be informed that in as much as the donee is a charitable 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, as amended, subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. Moreover, the Deed of Donation is not subject to documentary stamp tax. However, the acknowledgement on said deed is subject to documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 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 null and void. EAcIST Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service