Donation Made by the Benedictine Sisters in Favor of St. Scholastica's Academy of Pampanga, Inc.

January 21, 1987 BIR RULING NO. 013-87 104 198-86 013-87 S i r : This refers to your letter dated November 8, 1986, requesting a ruling to the effect that the donation of four (4) parcels of registered land located in the Barrio of San Jose, San Fernando, Pampanga covered by T.C.T. Nos. 11108, 78003-R and 43327-R of the Registry of Deeds for the province of Pampanga made by the community of Benedictine Sisters in favor of St. Scholastica's Academy of Pampanga, Inc., by virtue of a Deed of Donation executed on July 2, 1976 is exempt from donor's tax as well as exemption of said donation from the documentary stamp tax. In reply, I have the honor to inform you that since the donee is an educational institution incorporated as non-profit entity, paying no dividends, governed by trustees who receive no compensation and devoting all its income, whether student's fees or gifts, donations, subsidies or other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in its articles of incorporation, the aforementioned donation is exempt from the payment of donor's tax pursuant to Section 104 of the Tax Code, as amended, provided that not more than thirty per centum (30%) of said gift shall be used by the donee for administration purposes. Moreover, the deed of donation is not subject to the documentary stamp tax prescribed by Section 209 of the Tax Code on deed of sale and conveyance of real property since the transfer is gratuitous and has no consideration. (Section 161, Regulations No. 26 or the Documentary Stamp Tax Regulations). However, the acknowledgment issued by the notary public is subject to the documentary stamp tax imposed on certificates, in accordance with Section 201 of the same Code. hcetdc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner