BIR Ruling No. 027-11

February 2, 2011 BIR RULING NO. 027-11 Section 101 (A) (3) Tax Code of 1997; BIR Ruling No. 452-93; BIR Ruling No. 252-93; BIR Ruling No. DA-028-98; BIR Ruling No. DA-118-2005 Daughters of Charity of the Most Precious Blood Thomas M. Fusco Formation House 242 Kabatuhan St., Deparo, Novaliches, Quezon City Attention: Sr. Vincenza Iacopinelli, DCPB Local Superior Gentlemen : This refers to your letter dated December 2, 2009 which was indorsed to this Office by the Regional Director, Revenue Region No. 13, Cebu City, requesting in effect for exemption from the payment of donor's tax on the donation by Rhett E. Minguez and Susan Maribao of a parcel of land to Daughters of Charity of the Most Precious Blood. Documents submitted show that Rhett Minguez (TIN 126-042-652) and Susan Maribao (TIN 251-104-770) are the co-owners of a parcel of land located at Dakit, Bogo City, Cebu described as Cadastral Lot No. 2653-A-2-B with an area of Eight Thousand (8,000) square meters and as evidenced by Tax Declaration No. 24949. On November 10, 2009, a Deed of Donation was executed by the afore-named donors in favor of the Daughters of Charity of the Most Precious Blood, Inc. (TIN 242-722-104-000),a religious organization registered with the Securities and Exchange Commission (SEC) under SEC Registration Certificate No. ANO94-00004908 dated December 26, 1994. 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) DSCIEa Inasmuch as Daughters of Charity of the Most Precious Blood is a religious corporation, any donation to it is 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 gift 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 deed of donation is 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