Megaworld Corporation

October 16, 2008 BIR RULING [DA-(DT-013) 304-08] 101 (A) (2); DA-618-2004 Megaworld Corporation 28/F The World Centre 330 Sen. Gil Puyat Ave. Makati City Attention: Atty. Monica T. Salomon FVP, Corporate Management Gentlemen : This refers to your letter dated September 8, 2008 requesting for a ruling that the intended donation by Megaworld Corporation (Megaworld for brevity) of a parcel of land in favor of the City Government of Iloilo is exempt from donor's tax and documentary stamp tax. Documents submitted show that Megaworld acquired the Old Iloilo Airport located at Manduriao, Iloilo City, portions of which are occupied by informal settlers. In its desire to use the aforesaid property, Megaworld needed to relocate the squatters thereon and so it purchased another parcel of land from Spouses Delfin Gonzales and Estrella J. Maravilla (Subject Property) with an area of 30,000 sq.m. (fraction of 72,672 sq.m. lot) covered by Transfer Certificate of Title (TCT) No. 6956-(T-15753) and located at Jaro, Iloilo City. On April 10, 2008, Megaworld entered into a Memorandum of Agreement (MOA) with the City Government of Iloilo, whereby it offered to donate to the latter the Subject Property, thru a Deed of Donation to be executed at a later date. The Subject Property shall be used as a housing site for the informal settlers to be relocated from the Old Iloilo Airport at Manduriao, Iloilo and for other informal settlers which the City Government of Iloilo may allow to settle in said property. Pursuant to the MOA, aside from donating the Subject Property, Megaworld shall cause the back filling of the land and provide two shallow wells for the use of the settlers therein. In reply, please be informed that inasmuch as the donee is a political subdivision of the government, the above-stated donation is exempt from the payment of donor's tax pursuant to Section 101 (A) (2) of the Tax Code of 1997. SEIacA Moreover, the subject donation will not be subject to the documentary stamp tax prescribed under Section 196 of the Tax Code of 1997, but the Deed of Donation shall be subject to the notarial acknowledgment of P15.00 imposed under Section 188 of the same Tax Code. 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 as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service