BIR Ruling [DA-611-06]

October 11, 2006 BIR RULING [DA-611-06] Section 101 (A) (2); BIR Ruling No. DA-618-04 City of Malabon City Legal Department F. Sevilla Boulevard San Agustin, Malabon City Attention: Atty. Roberto A. Lim, Jr. Gentlemen : This refers to your letter dated August 8, 2006 requesting for confirmation of your opinion that the donation of real property by B.E. San Diego, Inc. to the City of Malabon is not subject to donor's tax. As represented, B.E. San Diego, Inc. with business address at 462 C. Palanca St., Quiapo, Manila donated a parcel of land covered by Transfer Certificate of Title No. M-31842, and consisting of Three Thousand Eight Hundred and Seventy-one (3,871) square meters to the City of Malabon. In reply, please be informed that since the donee is a political subdivision of the Government, the aforementioned donation of a parcel of land is exempt from the payment of donor's tax pursuant to Section 101(A)(2) of the Tax Code of 1997 which reads as follows: "SEC. 101. Exemption of Certain Gifts . The following gifts or donations shall be exempt from the tax provided for in this Chapter: (A) In the Case of Gifts Made by a Resident. (1) . . . (2) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government; and (3) . . . xxx xxx xxx" Moreover, the aforesaid Deed of Donation is not subject to the documentary stamp tax under Section 196 of the Tax Code of 1997 but only to the documentary stamp tax of PhP15.00 on certification under Section 188 of the same Code. Thus 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 as null and void. DACcIH Very truly yours, (SGD.) GREGORIO V. CABANTAC Deputy Commissioner