BIR Ruling No. 003-13

January 3, 2013 BIR RULING NO. 003-13 Sec. 101 (A) (2) of the Tax Code of 1997; BIR Ruling No. 175-11; BIR Ruling No. 387-11; BIR Ruling No. 300-11 Department of Tourism Department of Tourism Building T.M. Kalaw Street, Rizal Park, Manila Attention: Ramon R. Jimenez, Jr. Secretary Gentlemen : This refers to your letter dated December 3, 2012, requesting exemption from the payment of donor's tax on the donation of Megaworld Corporation (Megaworld) to the Department of Tourism (DOT) to be used as the site of the proposed Iloilo Convention Center. DHSEcIc It is represented that Megaworld, a corporation duly organized and existing under the laws of the Philippines is the registered owner of parcel of land identified as Lot 6, of the Cons. Sub. Plan, PCS-06-005277, being a portion of the consolidation/subdivision of lots 3112 to 3121, 3126, 3127, 3129, 3131, 3132, 3142, 3143, 3188, 3197, 3200, 3261 & 3262, Iloilo Cadastre; Lots 3124-B-2 to 3124-B-4, 2125-B, PSD-21713; Lots 3128-A, 3130-A, 3136-A & 3136-B, PSD-56373; Lots 3178-B-1-A, 3182-A, 3183-C-1, PSD-56525; Lot 3182-A, PSD-56526; Lot 3183-B-1, PSD-52283; Lots 3260-A, PSD-55301 & Lot 3264-A, PSD-64801, LRC Record No. covered by Transfer Certificate of Title (TCT) No. 095-2010001063 issued by the Registry of Deeds for Iloilo City. The aforesaid property is situated at Brgy. Mandurriao, Iloilo City with an area of Twenty Eight Thousand Six Hundred Twenty Seven square meters (28,627 sq.m.),more or less. On the other hand, DOT, is an agency of the National Government; and that on November 13, 2012, a Deed of Donation was executed whereby the owner transfers and conveys Seventeen Thousand Three Hundred Seventy One square meters (17,371 sq.m.) of the subject property to the DOT. In reply, please be informed that under Section 101 (A) (2) of the Tax Code of 1997, as amended, 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 Government are exempt from donor's tax. Considering that the above donation was made, in so far as the Seventeen Thousand Three Hundred Seventy One square meters (17,371 sq.m.) portion thereof of the property covered by TCT No. 095-2010001063 is concerned, by Megaworld in favor of DOT, an agency of the National Government, said donation, therefore, is exempt from donor's tax. (BIR Ruling No. 175-11 dated May 27, 2011) Moreover, the Deed of Donation is not subject to documentary stamp tax. However, the acknowledgment on said deed is subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997, as amended. (BIR Ruling No. 387-11 dated October 18, 2011 and BIR Ruling No. 300-11 dated May 12, 2011) Lastly, the Register of Deeds shall annotate the Deed of Donation at the back of the Transfer Certificate of Title because failure to comply with particular terms therein shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue