Nolledo Hermosura & Uriarte-Tan Law Offices

May 20, 2009 BIR RULING [DA-(DT-027) 238-09] 101 (A) (3); DA-618-2004 Nolledo Hermosura & Uriarte-Tan Law Offices 32nd Fl. Tower One Building Ayala Triangle, Ayala Ave. Makati City Attention: Attys. Mildo C. Sison and Elner A. Reyes Gentlemen : This refers to your letter dated April 8, 2009 requesting on behalf of your client, Avida Land Corporation (Avida), for confirmation of opinion that Avida's donation of a real property to the Roman Catholic Bishop of Lucena, Inc. (RCBL) is exempt from donor's tax and documentary stamp tax (DST) pursuant to Section 101 in relation to Section 196 of the Tax Code of 1997, as amended. CTcSIA It appears that Avida is a domestic corporation duly organized and existing under Philippine laws with principal office at the 8th Floor, Mondragon House, 324 Sen. Gil Puyat Ave., Makati City. It is currently developing an integrated residential community in Lucena City known as "Avida Communities Quezon" which is equipped with educational and other support facilities to complement the development and at the same time cater the needs of the residents and the community in general. On the other hand, RCBL is a corporation sole duly registered with the Securities and Exchange Commission (SEC) on September 27, 1950, its principal office is located at Bishop's Palace, Sentro Pastoral, Barangay Isabang, Lucena City, Quezon. It is a qualified donee tax-entity pursuant to Sec. 101 (A) (3) of the 1997 Tax Code. It is likewise a principal member of Maryhill College, Inc., a non-stock, non-profit corporation operated exclusively for educational purposes. Avida is in need of a school locator for the development of the afore-quoted community and as such, had invited RCBL to establish, operate and maintain an educational institution through Maryhill College, Inc. to provide for the educational needs of the residents of the said community. For the purpose of establishing a school in the residential community project, Avida donated various real properties in favor of RCBL through a Deed of Donation executed by the parties on December 4, 2008, the lists of real property donated by Avida to RCBL are as follows: 1. A parcel of land, with an area of Thirty-two Thousand One Hundred Eighty Eight (32,188) square meters, more or less, located in Brgy. Isabang, Lucena City registered under and specifically described on Transfer Certificate of Title No. T-334994 of the Registry of Deeds for the Province of Quezon; 2. All the development's model house units constructed within the parcel of land enumerated as follows (the "Model House Units"): i. Merida-Bare (Duplex 48), which has a floor area of 48 square meters and a lot area of 75 square meters; ii. Merida-Finished (Duplex 48), which has a floor area of 48 square meters and a lot area of 75 square meters; iii. Duplex 24-Bare, which has a floor area of 24 square meters and a lot area of 75 square meters; iv. Duplex 24-Finished, which has a floor area of 24 square meters and a lot area of 75 square meters; v. Cordova-Bare, which has a floor area of 36 square meters and a lot area of 75 square meters; vi. Cordova-Finished, which has a floor area of 36 square meters and a lot area of 75 square meters; vii. Sevilla (Zero Lot-Bare), which has a floor area of 33 square meters and a lot area of 105 square meters; viii. Catalua-Bare, which has a floor area of 33 square meters and a lot area of 105 square meters; CTEDSI ix. Catalua-Finished, which has a floor area of 33 square meters and a lot area of 105 square meters; and 3. Avida's former Site Offices constructed within the parcel of land described as follows (the "Site Offices"): i. Former Sales Office, which has a floor area and a lot area of approximately 96 square meters; and ii. Former Construction Management Department Office, which has a floor area and a lot area of approximately 72 square meters. EcDSHT In reply, please be informed that inasmuch as the donee is a religious corporation, the above-stated donation is exempt from the payment of donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997. 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