BIR Ruling [DA-671-99]

December 8, 1999 BIR RULING [DA-671-99] SGV & Co. 3rd Floor, Insular Life Building Cor. Gorordo and Gen. Maxilom Avenues Cebu City Attention: Atty . Lauris L . dela Pea Tax Division Gentlemen : This refers to your letter dated September 1, 1999 requesting for an exemption from the payment of donor's tax prescribed under Section 101(A)(3) of the Tax Code of 1997 on the donation made by your client, University of San Carlos in favor of the Society of Divine Word Southern Province, Inc. It is represented that your client, University of San Carlos, is a private non-stock, non-profit educational institution; that its primary purpose is to provide, support and maintain a Catholic institution which with proper facilities and means, can offer students and scholars alike a satisfying and ennobling experience in learning and growing in arts, sciences and professions for which the usual diplomas may be awarded and degrees, certificates and honors conferred; that it operates colleges, school campuses and various facilities necessary for its operations; that the University is administered by members of the Society of the Divine Word; that it is the registered owner of three (3) parcels of land located in Cebu City covered by Transfer Certificates of Title Nos. 23481, 23482 and 122848; that the donce, Society of Divine Word Southern Province, Inc. is a non-stock, non-profit religious corporation affiliated with the Roman Catholic Church; that it is organized and existing under the Philippine laws with principal office at 258-A D. Jakosalem St., Cebu City; that the purpose for which the organization was incorporated is for the administration of its affairs, properties and its temporalities; that as a non-stock, non-profit corporation, no part of the properties or income of the Society of Divine Word Southern Province, Inc. shall inure to the benefit of any member, trustee or officer of the corporation, or any private individual and no member, trustee, officer of the corporation, or any private individual shall be entitled to share in the distribution of any corporate assets on dissolution of the corporation; that no member of its Board of Trustee shall receive any compensation nor any type of remuneration in cash or in kind; and that the Society of Divine Word Southern Province, Inc. is duly registered as a donee institution under Batas Pambansa Blg. 45 as implemented by BIR NEDA Regulations; and that University of San Carlos donated the aforementioned parcels of land to the Society of Divine Word Southern Province, Inc. In reply, please be informed that inasmuch as the donee is a religious institution, 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 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. 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 and Enforcement Group)