BIR Ruling No. 083-13

February 25, 2013 BIR RULING NO. 083-13 Sec. 101 (A) (3) of the Tax Code of 1997; BIR Ruling No. 429-11 Lourdes School of Pampanga, Inc. San Roque Dau II Lubao, Pampanga Attention: Marilou de Lara Gentlemen : This refers to your letter dated August 15, 2011 requesting tax exemption from the payment of donor's tax on the donation of parcels of land of Marilou de Lara in favor of Lourdes School of Pampanga, Inc. CAETcH It is represented that Marilou de Lara, with Taxpayer's Identification No. 107-533-967-000, is the registered owner of parcels of land covered by Transfer Certificates of Title Nos. 659442-R and 659443-R situated in Brgy. San Roque Dau, containing areas of Six Thousand Four Hundred Fifty Four square meters (6,454 sq.m.) and Three Thousand Five Hundred Fifty Four square meters (3,554 sq.m.), respectively. On the other hand, the Lourdes School of Pampanga, Inc., is an educational institution with Taxpayer's Identification No. 210-840-212-000. On August 24, 2011 1 and January 10, 2013, Marilou de Lara executed a Deed of Donation in favor of the Lourdes School of Pampanga, Inc., over the described parcels of land. In reply, please be informed that gifts in favor of an 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 30% of said gift shall be used by the donee for administration purposes. (BIR Ruling No. 429-11 dated November 4, 2011) Inasmuch as Lourdes School of Pampanga, Inc. is an educational institution, 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 thirty percent (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 Transfer Certificate of Title because failure to comply with the said condition shall subject the donation of the above mentioned real properties to donor's tax. Moreover, the Deed of Donation is not subject to the capital gains tax and to the documentary stamp tax prescribed under Section 196 of the Tax Code of 1997, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Tax Code. 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. CSHEca Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue Footnotes 1. Rescinded by virtue of Affidavit of Rescission of First Donation dated August 22, 2012.