BIR Ruling No. 117-12

February 22, 2012 BIR RULING NO. 117-12 Sec. 101 (A) (3) and (B) (2); Sec. 99 of the Tax Code of 1997 Knights of Columbus of the Philippines Foundation, Inc. Shrine of Our Lady Mercy Dumalay Street, Barangay Sta. Monica District 2, Novaliches, Quezon City Attention: Joel R. Galapon Grand Knight Gentlemen : This refers to your letter dated August 15, 2010, requesting for a ruling exempting from the payment of donor's tax, the donation by Ceroferr Realty Corporation of a parcel of land with improvement, to the Knights of Columbus Philippines Foundation, Inc. Shrine of Our Lady of Mercy (K of C). As represented, K of C is a non-stock, non-profit charitable and civic corporation duly organized and existing under and by virtue of the Philippine laws, with Securities and Exchange Commission (SEC) Registration No. 43282 dated February 9, 1971. The purposes for which it was incorporated are as follows: 1. To undertake any charitable, relief, educational and social welfare activities; 2. To provide for religious and spiritual needs of the members of the Knights of Columbus of the Philippines; 3. To render aid and assistance to the deserving members of the Knights of Columbus of the Philippines and their close relatives; and 4. To assist in implementing the objectives and worthwhile projects of the Knights of Columbus. In reply, please be informed that gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited non-government organization, trust or philanthropic organization or research institution or organization are exempt from the payment of donor's tax pursuant to Section 101 (A) (3) and (B) (2) of the Tax Code of 1997, as amended, subject to the condition that no more than 30% of the said gifts shall be used by the donee for administration purposes. Section 101 (A) (3) further requires that the organization must devote all its income to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation. Such purposes are limited to educational, charitable, religious, cultural, social welfare and research. aCHDAE In the case of K of C, whilst it is engaged in charitable activities, it is also organized for and engaged in fraternal activities, which are not within the purview of the said provision providing for a tax exemption. Accordingly, gifts to K of C are subject to the donor's tax imposed under Section 99 of the Tax Code of 1997, as amended. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue