BIR Ruling No. 024-10

August 4, 2010 BIR RULING NO. 024-10 Sec. 101 (B) (1); 107 (A); BIR Ruling No. 145-90; BIR Ruling No. 057-98; BIR Ruling No. 481-98; BIR Ruling No. DA-371-00; BIR Ruling No. DA-028-01 Department of the Interior and Local Government A. Francisco Gold Condominium II, EDSA cor. Mapagmahal St.,Diliman, Quezon City Attention: Usec. Austere A. Panadero Undersecretary for Local Government Gentlemen : This refers to your letter dated May 25, 2010, received by this Office on June 11, 2010 by way of 1st Indorsement from the Department of Finance dated June 3, 2010, requesting exemption from donor's tax on the donation made by The World Bank-Manila in favour of the Department of the Interior and Local Government (DILG) of a motor vehicle. aTEHIC Documents submitted disclosed that The World Bank is the registered owner of a one (1) unit 2000 Toyota Tamaraw with chassis no. KF80-8013859 and engine no. 7K-0313268 with Registration Certificate No. 67178373 of the Department of Transportation and Communications; that The World Bank, represented by its Country Director, Bert Hofman, executed a Deed of Donation over the subject vehicle on November 3, 2008 in favor of the DILG; that on the same date, the DILG's representative, Secretary Ronaldo V. Puno accepted the donation as evidenced by a Deed of Acceptance; and that in support of your request, you have attached the following documents: (1) Deed of Donation; (2) Deed of Acceptance; (3) Copies of the vehicle's Land Transportation Office (LTO) Official Receipt and Certificate of Registration; (4) Copy of the Department of Foreign Affairs (DFA) letter to The World Bank dated March 6, 2000; (5) Copy of the World Bank's letter dated July 31, 2008 addressed to the Department of Foreign Affairs (DFA) requesting permission to donate a motor vehicle; and (6) Copy of the DFA's letter dated August 13, 2008 interposing no objection to the donation. In reply, please be informed that under Section 101 (B) (1) of the Tax Code of 1997, "gifts made by a non-resident to or for the use of the National Government or any entity created by any of its agencies which is not conducted to profit, or to any political subdivision of the Government" shall be exempt from donor's tax. (BIR Ruling No. 145-90 dated August 9, 1990; BIR Ruling No. DA-371-00 dated October 15, 2000) Accordingly, the subject donation of The World Bank to the DILG, which is an agency of the National Government, is exempt from donor's tax. However, the subject importation shall be subject to the 10% [now 12%] VAT pursuant to Section 107 (A) of the Tax Code of 1997. (BIR Ruling No. DA-028-01 dated March 7, 2001) Moreover, the Deed of Donation is not subject to documentary stamp tax. However, the acknowledgment on said deed is subject to documentary stamp tax of 15.00 imposed under Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-481-98 dated November 9, 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. aDcETC Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue