Batangas Land Company, Inc.

April 23, 2009 BIR RULING [DA-(DT-019) 209-09] Sec 101 (A) (2); DA 562-06 Batangas Land Company, Inc. NDC Building, 116 Tordesillas St. Makati City Attention: Lilia L. Arce President Gentlemen : This refers to your letter dated January 23, 2009, requesting for tax exemption of the transfer of a parcel of land by way of donation in favor of the Municipality of Paracale, Province of Camarines Norte. It is represented that Batangas Land Company (BLC, for brevity) is the registered owner of a parcel of land with an area of one hundred thirty eight thousand eight hundred ninety nine (138,899) square meters, more or less, covered and particularly described under Transfer Certificate of Title No. T-67502 (hereinafter referred to as the "Property"; that BLC's Board of Directors approved the donation of about 3,166 square meters of the Property; that Sanggunian Resolution No. 18-2008 dated January 14, 2008 duly signed by the members of the Sangguniang Bayan of the Municipality of Paracale, Camarines Norte was issued authorizing its mayor to sign for and in behalf of the Municipality the necessary documents relative to the transfer of ownership of the parcel of land to the Municipality of Paracale; and that a Deed of Donation was executed by and between BLC and the Municipality of Paracale, Camarines Norte, over an area of 3,166 square meter portion of the Property. In reply, please be informed that since the donee, the Municipality of Paracale, is a government political subdivision, the donation is exempt from the payment of donor's tax pursuant to Section 101 of the National Internal Revenue Code of 1997, as amended, which provides as follows: "Section 101. Exemption of Certain Gifts . . . . (A) In the Case of Gifts Made by a Resident. xxx xxx xxx (2) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government". 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, but only to the documentary stamp tax 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 null and void. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service