BIR Ruling [DA-562-06]

September 19, 2006 BIR RULING [DA-562-06] Section 101 (A) (3); S30-056-2001 Office of the Municipal Mayor Municipality of Magdalena Magdalena, Laguna Attention: Ms. Nieva B. Reodica Municipal Mayor Gentlemen : This refers to your letter dated July 10, 2006 requesting for exemption from the payment of donor's tax and capital gains tax relative to the donation in favor of Municipal Government of Magdalena. It appears that a Deed of Donation Inter Vivos was executed by Manuel D. Dizon and Christina D. Gabaya as donor, and the Municipality of Magdalena, Laguna, as represented by its Mayor, Honorable Nieva B. Reodica, as donee; that the object of the donation is a parcel of land covered by TND-99-015-17-0041. Lot No. 4-A, TCT No. 80694 (CLOA No. 00718477) TCT No. C-1802 NORTH-E-by Road: SOUTH-W-Lot 4-B: EAST-S-Salasad Creek; WEST RAAMBANG BAYAN Lot No. 9, of the Register of Deeds of Laguna, containing an area of 50,420 square meters; that only a portion of the said land, particularly 5,000 square meters at northern portion of the land is intended to be donated; and that the donation was for and in consideration of the love and affection of the donor to the their town-mates. In reply, please be informed that inasmuch as the donee is a political subdivision of the National Government, the aforementioned donation is exempt from the payment of donor's tax pursuant to Section 101(A)(2) of the Tax Code of 1997. Moreover, the Deed of Donation is not subject to the capital gains tax and to the documentary stamp tax prescribed under Section 196 of the Tax Code of 1997, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Tax Code. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. CIScaA Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service