Request for Exemption from Donor's Tax and Documentary Stamp Tax on a Donation of a Parcel of Residential Land in Favor of the Church of St. Mary

February 26, 1992 BIR RULING NO. 065-92 196 94 (a) (3) 57-91 065-92 Church of St. Mary 708 9th St. 6 Avenue Grace Park, Kalookan City Attention: Ms . Lucille Ngo Vice-Chairwoman Gentlemen : This refers to your letter dated August 6, 1991 in effect requesting for exemption from donor's tax and documentary stamp tax on a donation of a parcel of residential land with an area of 304.5 square meters situated at Quezon St., Barrio Calaanan, City of Caloocan, Metro Manila, covered by TCT No. 22843 of the Registry of Deeds City of Caloocan, made by Mr. Miguel Tolentino in favor of the Church of St. Mary by virtue of Deed of Donation executed on January 15, 1991. The documents submitted disclosed that the Church of St. Mary, is a religious society registered with the SEC on December 12, 1953; that the general purpose of the association is to operate and maintain a church, to secure its advancement by providing for religious services, religious schools, and to take charge of, hold and manage all property, personal and real, that may from time to time come to or vest in the association for its religious or educational purposes; that the management of the affairs of the association shall be vested in a Board of Trustees composed of five members and that the properties and income of the association shall be used further to its aforementioned aims and purposes. In reply, please be informed that pursuant to Section 94(a)(3) of the Tax Code, as amended, gifts made in favor of a religious institution shall be exempt from the donor's taxes provided that not more than thirty per centum of said gifts shall be used by such donee for administration purposes. Such being the case, since the donee, Church of St. Mary, is a non-stock, non-profit religious institution within the contemplation of Section 94(a)(3) of the Tax Code, as amended, then the aforesaid donation is exempt from donor's tax provided that not more than thirty per centum (30%) of said donor and shall be used by the donee for administration purposes. Moreover, the Deed of Donation is not subject to the documentary stamp tax as prescribed by Section 196 of the Tax Code and the Deed of Sale and Conveyance of Real Property since the transfer is gratuitous and has no consideration. (Section 161, Revenue Regulations No. 26 of the Revised Documentary Stamp Tax Regulations) However, the acknowledgment of the Deed of Donation before a Notary Public is subject to the documentary stamp tax of P3.00 pursuant to Section 188 of the same Code. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue