Atty. Francisco I. Naputo, CPA

August 1, 2008 BIR RULING [DA-(DT-005) 099-08] 101 (A) (3); DA-329-2008 Atty. Francisco I. Naputo, CPA 73 Apacible St., Philam Village Las Pias City S i r : This refers to your letter dated June 20, 2008 requesting on behalf of your client, North Philippine Union Mission Corporation of Seventh-Day Adventists Church ("NPUM" for brevity), for confirmation of your opinion that its proposed donation of real properties together with improvements thereon, to Adventist University of the Philippines of Seventh-Day Adventists, Inc. ("AUP" for brevity) is exempt from the payment of donor's tax. It appears that NPUM is a non-stock, non-profit religious corporation organized and existing under the laws of the Philippines; that it is duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CN200617734; that it operates a number of schools in the country as in the case of AUP located at Bgy. Puting Kahoy, Silang, Cavite, likewise registered with Securities and Exchange Commission under SEC Registration No. 1306 dated October 17, 1997; that it bears stressing though that some of NPUMS's officers are ex-officio members of AUP's Board of Trustees and whose Chairman is the President of NPUM, a standard set up applied to the rest of the schools under NPUM umbrella; that AUP is duly recognized by the Department of Education (DepEd) and Commission on Higher Education (CHED), clothed with authority to offer various courses from elementary to graduate level; that the same was granted university status effective during the Collegiate Year 1996-1997 based on en banc CHED Resolution No. 132-96; that on November 28, 2003, AUP was a recipient of CHED's AWARD OF DISTINCTION for the singular privilege of attaining AUTONOMOUS STATUS effective October 27, 2003 until October 26, 2008; and that NPUM is proposing to donate a number of its assets to AUP, specifically the parcels of land encompassing the entire AUP campus with an area of more than One Hundred Fifty hectares (150 has.) together with improvements thereon, covered by Transfer Certificate of Title Nos. T-69507, 78206, 78208, 211472, and 325366 issued by the Registry of Deeds for the Province of Cavite. EHSIcT In reply, please be informed that inasmuch as the donee is an educational institution, donations to it are exempt from the payment of donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, as amended, subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. The Register of Deeds shall, however, annotate this condition at the back of the Transfer Certificate of Title because failure to comply with the said condition shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. Moreover, the Deed of Donation that will be executed for the purpose is not subject to documentary stamp tax. However, the acknowledgment on said deed is subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997, as amended. 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, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service