BIR Ruling [DA-587-99]

October 7, 1999 BIR RULING [DA-587-99] Cruz-Feliciano Law Offices 3rd Floor, Feliciano Building 7426 Santillan Makati City Attention: Atty . Myrna Cruz-Feliciano Gentlemen : This refers to your letter dated May 6, 1999 requesting for a ruling that the donation by Trade Facilities & Insurance Factors, Inc. (Donor) of two (2) parcels of land in favor of Salesian Society of St. John Bosco is exempt from the payment of donor's tax and documentary stamp tax. prcd It is represented that the Donor and Success Homes, Inc. (Success) are the registered co-owners in fee simple of a parcel of land situated in the Barrio of Proper Bansud, Municipality of Bansud, Province of Oriental Mindoro containing an area of 70,595 square meters and covered by TCT No. 98657 issued by the Registry of Deeds for the Province of Oriental Mindoro; that Donor had caused the subdivision of the above-mentioned parcel of land into five (5) lots, namely Lots 2-D-1, 2-D-2, 2-D-3, 2-D-4 and 2-D-5; that Salesian Society of St. John Bosco, on the other hand, is a corporation sole duly organized and existing under the laws of the Philippines with principal office address at Pasong Tamo corner Arnaiz Avenue, Makati City; that for and in consideration of the love and affection which the Donor has for Salesian Society of St. John Bosco and the former's esteem for the latter's dedication to the total human and spiritual development of a person, with particular concern for the care, dedication and religious formation of the youth, the Donor, by way of Deed of Donation, transferred and conveyed to Salesian Society of St. John Bosco two (2) parcels of land, namely Lot 2-D-3 with an area of 3,668 square meters and Lot 2-D-4 with an area of 3,976 square meters; that Success as the co-owner of the original Lot 2-D gave its consent to the donation by Trade Facilities & Insurance Factors, Inc. of Lots 2-D-3 and 2-D-4 in favor of Salesian Society of St. John Bosco on the understanding that the combined area of the donated lots consisting of 7,644 square meters shall be charged against Donor's undivided share in the original Lot 2-D; and that the Donor's share of 50,000 square meters which appears in TCT No. 98657 is, by virtue of the said donation, reduced to 42,356 square meters. In reply, please be informed that since the donee is a religious organization, the aforementioned 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. Moreover, the aforesaid Deed of Donation is not subject to 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 Code. (BIR Ruling No. 032-94 dated February 3, 1994) LexLib 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)