Request for Exemption from Payment of Donor's Tax on Donations of Real Properties Made in Favor of Your Client PAREF Woodrose School, Inc.

March 5, 1991 BIR RULING NO. 039-91 94 (a) (3) 200-90 039-91 Gentlemen : This refers to your letter dated September 17, 1990 requesting, in effect, exemption from the payment of donor's tax on donations of real properties made in favor of your client PAREF Woodrose School, Inc. Documents submitted show that your client is a non-stock, non-profit corporation established primarily for the purpose of establishing, maintaining, operating and administering a school for children of any nationality; that it does not pay any dividends; governed by trustees who received no compensation and devoting all its income, whether student's fees, or gifts donations, subsidies or other forms of philanthropy, to the promotion and accomplishments of the purposes for which it was created; and that it is duly registered with this Office as a donee institution in accordance with the provisions of BIR-NEDA Regulations No. 1-81, effective April 30, 1981, as amended. In reply, please be informed that under Section 94(a) of the Tax Code, as amended, gifts made in favor of an educational institution which is incorporated as a non-stock entity, paying no dividends, governed by trustees who received 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 provided, that not more than thirty percent (30%) of such gifts shall be used by said donee for administration purposes, shall be exempt from the payment of the donor's tax. Such being the case, since your client, PAREF Woodrose School, Inc., is a non-stock, non-profit entity meeting all the necessary qualifications and conditions provided for under Section 94(a) 3 of the Tax Code as above stated, any donations of real property made in its favor are therefore, exempt from the payment of donor's tax. Moreover, the above mentioned donations shall also be deductible for income tax purposes, in an amount not in excess of 6% in the case of an individual donor and 3% in the case of a corporate donor of the donor's taxable income derived from business as computed without the benefit of said deduction (Section 29 (h) (11), Tax Code). aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner By: (SGD.) VICTOR A. DEOFERIO, JR. Deputy Commissioner Officer-in-Charge