Cabuyao Water District

December 8, 2009 BIR RULING [DA-(DT-069) 755-09] 101 (A) (2); DA-481-98 Cabuyao Water District 2nd Floor Yetan Commercial Center Brgy. Banay-banay, Cabuyao Laguna Attention: Mr. Ernesto D. Dimaunahan General Manager Gentlemen : This refers to your letter dated October 28, 2009, requesting for exemption from the payment of donor's tax under Section 101 of the Tax Code of 1997. Documents submitted disclosed that the Cabuyao Water District (CABWAD) is a government owned and controlled corporation; that AFP Mutual Benefit Association, Inc. (AFP MBAI) is a corporation duly organized and existing under the laws of the Philippines, with principal office at AFP MBAI Building, Camp General Emilio Aguinaldo, Quezon City; that AFP MBAI (donor) is the owner of two (2) parcels of lot within the subdivision known as Block-1 Lot 40 and Block-23 Lot 68, Katapatan Mutual Homes Subdivision Phase V located in Barangay Banay-banay, Cabuyao, Laguna with a total area of Seven Hundred Sixty Square meters (760.00) more or less, with Transfer Certificate of Title Nos. 126646 and 127591; that in accordance with the Revised Implementing Rules and Regulations for B.P. 220 particularly Section 23, which states that "The Owner or project developer shall donate the roads and open spaces found in the project to the local government of the area after their completion had been certified to by the Board and it shall be mandatory for the said local government, to accept such donations. Parks and playgrounds may be donated to the duly accredited Homeowners Association of the project with the consent of the city or municipality concerned under P.D. 1216"; that the housing project has been completed as certified by the Housing and Land Use Regulatory Board; and that a Deed of Donation was executed by and between AFP Mutual Benefit Association, Inc. and Cabuyao Water District transferring and conveying unto the later the aforesaid parcels of land. SHECcT In reply, please be informed that inasmuch as the donee is a government owned and controlled corporation, the aforesaid donation is exempt from the payment of donor's tax pursuant to Section 101 (A) (2) of the Tax Code of 1997. Moreover, the Deed of Donation executed for the purpose is not subject to the documentary stamp tax. However, the notarial acknowledgment on said deed is subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-481-98 dated November 9, 1998) Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service