Donation of the Newly Constructed Philippine Cultural High School Main Building

April 26, 1989 BIR RULING NO. 086-89 94 (a) (3) 000-00 086-89 Gentlemen : This refers to your letter dated November 28, 1988 requesting in effect a ruling as to whether or not the donation of the newly constructed Philippine Cultural High School Main Building in Jose Abad Santos St., Manila by the Philippine Cultural High School Alumni Association, Inc. in your favor is subject to donor's tax. It appears that the aforesaid building was constructed on your lot; that you are duly registered with the Securities and Exchange Commission as a non-stock, non-profit educational corporation which was formed among others, to establish, maintain, conduct and operate schools whether primary, intermediate or secondary and to grant scholarship or financial aid to deserving students; that you are incorporated as a non-stock entity, paying no dividends, governed by trustees who received no compensation and devoting all its income whether students' fees or gifts, donations, subsidies or other forms of philanthropy to the accomplishment and promotion of the purposes for which it was formed. (Par 8, Articles of Incorporation) In reply, please be informed that pursuant to Section 94(a)(3) of the Tax Code, as amended, gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation or institution are exempt from the donor's tax; provided that not more than thirty per centum of said gifts shall be used by such donee for administration purposes; that said Section 94 also states that for purposes of the exemption, a non-profit educational corporation is a school, college or university incorporated as a non-stock entity, paying no dividends, governed by trustees who receive no compensation and devoting all its income to the accomplishment and promotion of the purposes enumerated in its articles of incorporation. Accordingly, and since the aforesaid donation in your favor clearly falls within the purview of the above exemption provision, this Office is of the opinion as it hereby holds that the aforementioned donation is exempt from the payment of donor's tax. Very truly yours, (SGD.) JOSE U. ONG Commissioner