Atty. Francisco I. Naputo, CPA

October 5, 2008 BIR RULING [DA-(DT-011) 274-08] 101 (A) (3); DA-(DT-005) 099-2008 Atty. Francisco I. Naputo, CPA 73 Apacible St., Philam Village Las Pias City S i r : This refers to your letter dated August 25, 2008 requesting on behalf of your client, Central Philippine Union Conference Corporation of the Seventh-Day Adventist Church ("CPUC" for brevity), for exemption from the payment of donor's tax on its proposed donation to Central Philippine Adventist College, Inc. (hereinafter called "CPAC"). It appears that CPUC is a non-stock, non-profit religious corporation created under the laws of the Philippines duly registered under Securities and Exchange Commission (SEC) under SEC Registration No. 26514 with principal office address at 112 Gorordo Avenue, Cebu City; that it operates a number of schools in the country; that CPAC is likewise duly registered with the Securities and Exchange Commission under SEC Registration No. E2002000201 dated March 26, 2002; that it bears stressing though that CPUC's officers are ex-officio members of CPAC's Board of Trustees and whose Chairman is usually the President of CPUC, a standard set up applied to the rest of the schools under CPUC umbrella; that CPAC is duly recognized the Department of Education (DepEd) and Commission on Higher Education (CHED), is clothed with authority to conduct and operate various college courses; and that CPUC is proposing to donate a number of its assets to CPAC, specifically the parcels of land encompassing the entire CPAC campus with a total area of approximately One Hundred Fifteen Hectares (115 has.) together with improvements thereon covered by several land titles issued by the Register of Deeds of Bacolod City among which are TCT Nos. 102001, 107349, 107350, 107351, 107353, 135350, 135351, 135352, 184218, 196020, 196021, 196022 and 196023. CHcETA 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