BIR Ruling No. 099-13

March 20, 2013 BIR RULING NO. 099-13 Section 101 (A) (3), NIRC of 1997; BIR Ruling No. 225-11; BIR Ruling No. 241-11; BIR Ruling No. 471-11 Ifugao State University Nayon, Lamut Ifugao Attention: Serafin L. Ngohayon, Ph. D. University President Gentlemen : This refers to your letter dated June 20, 2012, requesting for the issuance of a certificate exemption from the payment of donor's tax relative to the donation in favor of Ifugao State University . DaAISH Documents submitted disclosed that the Ifugao State University , with Taxpayer Identification No. 000-536-809, is a government educational institution created under Republic Act (R.A.) No. 9720 with principal address at Nayon, Lamut, Ifugao; and that on February 19, 2012, a Deed of Donation was executed by Mr. Florencio D. Dimog , of legal age, married, Filipino and with residence at Nayon, Lamut, Ifugao, in favor of Ifugao State University as donee for a parcel of land consisting of five thousand three hundred thirty one square meters (5,331 sq. m.) located at Potia, Alfonso Lista, Ifugao covered by Transfer Certificate of Title No. P-10061 Registry of Deeds of Alfonso Lista, Ifugao. In support of its request, Ifugao State University has completely submitted on 12 September 2012 the following documents: 1) Certified Copy of Tax Declaration of Real Property issued by the Office of the Municipal Assessor of Alfonso Lista, Ifugao; 2) Deed of Donation between Mr. Florencio D. Dimog and Ifugao State University; and 3) Transfer Certificate of Title No. P-10061. In reply, please be informed that Section 101 (A) (3) of the Tax Code of 1997, as amended, provides: "SEC. 101. Exemption of Certain Gifts . The following gifts or donations shall be exempt from the tax provided for in this Chapter: (A) In the Case of Gifts Made by a Resident. xxx xxx xxx (3) Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited non-governmental organization, trust or philanthropic, organization or research institution or organization: Provided, however, that not more than thirty percent (30%) of said gifts shall be used by such donee for administrative purposes. . . ." Hence, inasmuch as the donee, Ifugao State University , is a government educational institution, donation to it is exempt from the payment of 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. The Register of Deeds shall annotate this condition at the back of the title. Section 185 of Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulations, implementing Title VII of the NIRC, provides that conveyances of realties not in connection with a sale, to trustees or other persons without consideration are not taxable. (BIR Ruling No. 225-2011 dated July 13, 2011; BIR Ruling No. 241-2011 dated July 22, 2011) Accordingly, the deed of donation is likewise not subject 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. (BIR Ruling No. 225-2011 dated July 13, 2011) 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. AEDISC Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue