Sister Rosario S. Calabia

June 16, 2010 BIR RULING [DA-(DT-012) 098-10] 101 (A) (3); BIR Ruling Nos. 452-93 and 252-93; DA-118-05; DA (DT-072) 780-2009 Sister Rosario S. Calabia Rizal, Laguna Madam : This refers to your letter dated August 19, 2009 which was indorsed to this Office by the Regional Director, Revenue Region No. 9, San Pablo City, requesting for exemption from the payment of donor's tax on your donation of a parcel of land to Canossian Daughters of Charity, Inc. TcEDHa Documents submitted show that Rosario S. Calabia (TIN 129-559-638-000) is the exclusive owner of a parcel of land located at Antipolo, Rizal, Laguna described as Cadastral Lot No. 2164 with an area of Three Thousand Two Hundred Twenty Two (3,222) square meters and as evidenced by Tax Declaration No. 23-0003-01055. On September 10, 2009, a Deed of Donation was executed by the afore-named donor in favor of the Canossian Daughters of Charity, Inc. (TIN 001-054-917-000), a religious organization registered with the Securities and Exchange Commission (SEC) under SEC Registration Certificate No. 41126 dated May 4, 1970. In reply, please be informed that gifts in favor of educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization is exempt from the payment of the 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 thirty percent (30%) of said gift shall be used by the donee for administration purposes. (BIR Ruling No. 452-93 dated November 19, 1993) Inasmuch as Canossian Daughters of Charity, Inc. is a religious corporation, any donation to it is exempt from the payment of donor's tax pursuant to the above provisions of the Tax Code subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. In case of donation of real property, the Register of Deeds shall annotate this condition at the back of the 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. Section 185 of Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulations, implementing Title VII of the Tax Code, provides that conveyances of realties not in connection with a sale, to trustees or other persons without consideration are not taxable. Accordingly, the deed of donation is likewise not subject to the documentary stamp tax prescribed under Section 196 of the Tax Code, as amended, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Code. (BIR Ruling Nos. 252-93 dated January 17, 1993 and DA-028-98 dated January 29, 1998) Furthermore, for purposes of full deductibility from the taxable business income of its donor, Canossian Daughters of Charity, Inc. must first be accredited by the Philippine Council for NGO Certification, Inc. (PCNC), this is pursuant to Sec. 34 (H) (2) (c) of the same Tax Code. (BIR Ruling No. DA-118-2005 dated April 6, 2005) TIEHSA 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.) MARISSA O. CABREROS OIC-Assistant Commissioner Legal Service