BIR Ruling No. 015-11

January 20, 2011 BIR RULING NO. 015-11 Section 101 (A) (3) of 1997 Tax Code; BIR Ruling No. 452-93; BIR Ruling No. 252-93; BIR Ruling No. DA-028-98 Evangelical Mission Society, Inc. Mahogany St.,Phase 2 Bangkal, Davao City Attention: Rev. Jae-Suk Lee Gentlemen : This refers to your undated letter, as indorsed by the Regional Director, Revenue Region No. 19, Davao City dated April 13, 2010, requesting for donor's tax exemption enjoyed by religious organizations under Section 101 (A) (3) of the Tax Code of 1997, as amended. Documents submitted show that The Evangelical Presbyterian Mission, Inc. (TIN 001-268-433) is the registered owner of a parcel of land covered by Transfer Certificate of Title No. T-194776 located at Bangkal, Davao City described as Lot 36 of the subdivision plan Psd-37091 with an area of Eleven Thousand Five Hundred Eighty (11,580) square meters (Subject Property).On the other hand, Evangelical Mission Society, Inc. (TIN 006-045-756) and Philippine Discipleship Training Institute, Inc. (TIN 006-047-547) are both non-stock non-profit religious corporations and are recipients of a donation of the afore-stated property made by The Evangelical Presbyterian Mission, Inc. On March 18, 2010, Deeds of Donation were executed by and among the said parties, whereby Evangelical Mission Society, Inc. shall receive 10,580 sq.m. of the said property and Philippine Discipleship Training Institute, Inc. shall be entitled to 1,000 sq.m. thereof which is also a portion of the Subject Property. In reply, please be informed that gifts in favor of educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization is exempt from the payment of the donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, as amended, subject to the condition that not more than thirty percent (30%) of said gift shall be used by the donee for administration purposes. (BIR Ruling No. 452-93 dated November 19, 1993) aECTcA Inasmuch as Evangelical Mission Society, Inc. and Philippine Discipleship Training Institute, Inc. are religious corporations, any donations to them are exempt from the payment of donor's tax pursuant to the above provisions of the Tax Code subject to the condition that not more than 30% of said gifts shall be used by the donee for administration purposes. In case of donation of real property, the Register of Deeds shall annotate this condition at the back of the title because failure to comply with the said condition shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. Section 185 of Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulations, implementing Title VII of the Tax Code, provides that conveyances of realties not in connection with a sale, to trustees or other persons without consideration are not taxable. Accordingly, the deeds of donation are likewise not subject to the documentary stamp tax prescribed under Section 196 of the Tax Code, as amended, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Code. (BIR Ruling Nos. 252-93 dated January 17, 1993 and DA-028-98 dated January 29, 1998) 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