Sanctuario De Nuestra Señora De La Paz Y Buen Viaje

September 22, 2008 BIR RULING [DA-(C-078)-248-08] Section 101 (A) (3);S30-056-2001 Sanctuario De Nuestra Seora De La Paz Y Buen Viaje La Paz, Tarlac Attention: Rev. Fr. Ramon V. Capuno Rector Gentlemen : This refers to your letter dated June 26, 2008 requesting for exemption, in behalf of the Roman Catholic Bishop of Tarlac, Inc. from the payment of taxes relative to the donation of a parcel of land to it. TDAHCS It appears that a Deed of Donation was executed by and between Joson Realty Corporation (Donor) and the Roman Catholic Bishop of Tarlac, Inc.;that the Roman Catholic Bishop of Tarlac, Inc. is a corporation sole, is represented by Bishop Florentino F. Cinanse, D.D.;and that the subject property is covered by Transfer Certificate of Title No. T-139114 by the Registry of Deeds for the Province of Tarlac; covered by 280 square meters, more or less. In reply, please be informed that Section 101 (A) (3) of the Tax Code of 1997, as amended provides: "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) ... (3) Gifts in favor of educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited non-government organization, trust or philanthropic organization or research institution or organization: ..." Accordingly, inasmuch as 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. 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, as amended, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Tax Code. AEcTaS For purposes of VAT, Section 105 of the Tax Code of 1997, as amended provides that any person who, in the ordinary course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added tax imposed in Section 106 and 108 of the same Code unless the transaction itself is among those exempt from VAT or subject to zero percent (0%) VAT. Considering that a donation is not among the exempt transactions listed in Section 109 of the Tax Code of 1997, complete relief from the VAT cannot be availed considering that the donor is a VAT registered person. Therefore, any input VAT pertaining to the VAT portion of the developmental cost of the subject parcel of land should not be claimed as input tax for any future transactions subject to VAT. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service