City of Taguig

May 18, 2009 BIR RULING [DA-(DT-025) 231-09] Section 101 (A) (2); BIR Ruling No. 108-94; DA-618-04; DA-600-06 City of Taguig Taguig City Hall, Gen. Antonio St., Tuktukan St., Taguig City Attention: Wilfredo C. Villar City Administrator Gentlemen : This refers to your letter dated February 27, 2009 requesting tax exemption of the donation of real properties by Banco de Oro Universal Bank, Inc. to the City of Taguig. It is represented that on September 25, 2008, Banco de Oro (BDO) Universal Bank, Inc. donated to the City of Taguig two parcels of land more particularly described as follows: 1) 542 sq.m. parcel of commercial land located at Barangay Bambang, Taguig City covered by TCT No. 1091 of the Registry of Taguig City; and 2) 5,313 sq.m. parcel of commercial land located at Barangay Bambang, Taguig City covered by TCT No. 1092 of the Registry of Taguig City. that said properties shall be developed into a housing project known as "BDO-GK" Village which will be undertaken in partnership with Gawad Kalinga Community Development Foundation, Inc. (GKCDFI) and is intended for the City's homeless and impoverished residents and constituents or the so called "poorest of the poor"; and that in support of your request, you submitted the following documents: a) Deed of Donation; b) Memorandum of Agreement by and between Banco de Oro; Unibank, Inc.; City of Taguig and GKCDFI; c) Latest Tax Declaration of the two properties; d) Transfer Certificates of Title; e) Articles and Plan of Merger between Banco de Oro Universal Bank, Inc. (now BDO-EPCI, Inc.) and Equitable-PCI; f) Amended Articles of Incorporation of Banco de Oro-EPCI, Inc. cSEaDA In reply, please be informed that Section 101 (A) (2) of the Tax Code of 1997 provides: "Section 101. Exemption of Certain Gifts. The following gifts or donations, shall be exempt from the tax . . .: (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; and xxx xxx xxx." In BIR Ruling No. DA-600-06 dated October 10, 2006, the BIR ruled that the donation of real property by Mr. Bonifacio C. Regalado in favor of The City Government of Quezon City is exempt from donor's tax, to wit: "In reply, please be informed that since the donee is a political subdivision of the Government, the aforementioned donation of a parcel of land with the buildings and improvements thereon, is exempt from the payment of donor's tax pursuant to Section 101(A)(2) of the Tax Code of 1997. Moreover, the aforesaid Deed of Donation is not subject to the documentary stamp tax under Section 196 of the Tax Code of 1997 but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same Code." In view of the foregoing, since the donee is a political subdivision of the Government and that the donated parcels of land shall be used for the City's housing project for the homeless and impoverished residents, the donation by Banco de Oro Universal Bank, Inc. of the two (2) parcels of land is exempt from the payment of donor's tax pursuant to the aforecited provision of the Tax Code of 1997. Moreover, the aforesaid Deed of Donation is not subject to the documentary stamp tax under Section 196 of the Tax Code of 1997, but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same 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, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service