BIR Ruling No. 129-13

April 4, 2013 BIR RULING NO. 129-13 Sections 101 (A) (2) and 196; BIR Ruling No. 381-2011; BIR Ruling No. 206-2011; BIR Ruling No. 175-2011 Municipality of Asuncion Office of the Municipal Mayor LGU, Asuncion, Davao Del Norte 8102 Attention: Joseph Nilo F. Parreas, MD Municipal Mayor Gentlemen : This refers to your letter dated November 5, 2009 requesting for tax exemption the donation made by Alberto M. Soriano to the Municipal Government of Asuncion. IEcDCa It is represented that Alberto M. Soriano is the owner in fee simple of parcels of land all located at Magatos, Asuncion, Davao del Norte, with a total area of ten thousand (10,000) square meters, more or less, embraced in and covered by the following transfer certificates of title: Transfer Tax Location Kind of Area Certificate of Declaration of Property Property (sq.m) Title No. 1 T-203759 01-0011-02245 Lot 37 Block 53 Land 100 Prk. 3, Magatos, Asuncion Davao Del Norte 2 T-203761 01-0011-02246 Lot 39 Block 53 Land 100 Prk. 3, Magatos, Asuncion, Davao Del Norte 3 T-203763 01-0011-02247 Lot 41 Block 53 Land 100 Prk. 3, Magatos, Asuncion, Davao Del Norte 4 T-203765 01-0011-02248 Lot 43 Block 53 Land 153 Prk. 3, Magatos, Asuncion, Davao Del Norte 5 T-203831 01-0011-01672 Lot 1 Block 59 Land 103 Prk. 3, Magatos, Asuncion, Davao Del Norte 6 T-203832 01-0011-01675 Lot 2 Block 59 Land 91 Prk. 3, Magatos, Asuncion, Davao Del Norte 7 T-203833 01-0011-01673 Lot 3 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 8 T-203834 01-0011-01674 Lot 4 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 9 T-203835 01-0011-01654 Lot 5 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 10 T-203836 01-0011-01653 Lot 6 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 11 T-203837 01-0011-01651 Lot 7 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 12 T-203838 01-0011-01652 Lot 8 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 13 T-203839 01-0011-01650 Lot 9 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 14 T-203840 01-0011-01649 Lot 10 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 15 T-203841 01-0011-01647 Lot 11 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 16 T-203842 01-0011-01648 Lot 12 Block 59 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 17 T-203843 01-0011-01646 Lot 13 Block 59 Land 85 Prk. 3, Magatos, Asuncion, Davao Del Norte 18 T-203844 01-0011-01645 Lot 14 Block 59 Land 91 Prk. 3, Magatos, Asuncion, Davao Del Norte 19 T-203845 01-0011-01620 Lot 1 Block 60 Land 88 Prk. 3, Magatos, Asuncion, Davao Del Norte 20 T-203846 01-0011-01621 Lot 2 Block 60 Land 81 Prk. 3, Magatos, Asuncion, Davao Del Norte 21 T-203847 01-0011-01619 Lot 3 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 22 T-203848 01-0011-01622 Lot 4 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 23 T-203849 01-0011-01618 Lot 5 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 24 T-203850 01-0011-01617 Lot 6 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 25 T-203851 01-0011-01605 Lot 7 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 26 T-203852 01-0011-01606 Lot 8 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 27 T-203853 01-0011-01604 Lot 9 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 28 T-203854 01-0011-01603 Lot 10 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 29 T-203855 01-0011-01591 Lot 11 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 30 T-203856 01-0011-01592 Lot 12 Block 60 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 31 T-203857 01-0011-01590 Lot 13 Block 60 Land 81 Prk. 3, Magatos, Asuncion, Davao Del Norte 32 T-203858 01-0011-01589 Lot 14 Block 60 Land 81 Prk. 3, Magatos, Asuncion, Davao Del Norte 33 T-203859 01-0011-01624 Lot 1 Block 61 Land 95 Prk. 3, Magatos, Asuncion, Davao Del Norte 34 T-203860 01-0011-01625 Lot 2 Block 61 Land 82 Prk, 3, Magatos, Asuncion, Davao Del Norte 35 T-203861 01-0011-01623 Lot 3 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 36 T-203862 01-0011-01626 Lot 4 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 37 T-203863 01-0011-01616 Lot 5 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 38 T-203864 01-0011-01615 Lot 6 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 39 T-203865 01-0011-01607 Lot 7 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 40 T-203866 01-0011-01608 Lot 8 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 41 T-203867 01-0011-01602 Lot 9 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 42 T-203868 01-0011-01601 Lot 10 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 43 T-203869 01-0011-01593 Lot 11 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 44 T-203870 01-0011-01594 Lot 12 Block 61 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 45 T-203871 01-0011-01588 Lot 13 Block 61 Land 118 Prk. 3, Magatos, Asuncion, Davao Del Norte 46 T-203872 01-0011-01627 Lot 1 Block 62 Land 112 Prk. 3, Magatos, Asuncion, Davao Del Norte 47 T-203873 01-0011-01628 Lot 2 Block 62 Land 100 Prk. 3, Magatos, Asuncion, Davao Del Norte 48 T-203874 01-0011-01614 Lot 3 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 49 T-203875 01-0011-01613 Lot 4 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 50 T-203876 01-0011-01609 Lot 5 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 51 T-203877 01-0011-01610 Lot 6 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 52 T-203878 01-0011-01600 Lot 7 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 53 T-203879 01-0011-01599 Lot 8 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 54 T-203880 01-0011-01595 Lot 9 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 55 T-203881 01-0011-01596 Lot 10 Block 62 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 56 T-203882 01-0011-01587 Lot 11 Block 62 Land 99 Prk. 3, Magatos, Asuncion, Davao Del Norte 57 T-203883 01-0011-01586 Lot 12 Block 62 Land 105 Prk. 3, Magatos, Asuncion, Davao Del Norte 58 T-203901 01-0011-01642 Lot 18 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 59 T-203902 01-0011-01646 Lot 19 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 60 T-203903 01-0011-01644 Lot 20 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 61 T-203904 01-0011-01573 Lot 21 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 62 T-203905 01-0011-01574 Lot 22 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 63 T-203906 01-0011-01575 Lot 23 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 64 T-203907 01-0011-01576 Lot 24 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 65 T-203908 01-0011-01577 Lot 25 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 66 T-203909 01-0011-01578 Lot 26 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 67 T-203910 01-0011-01579 Lot 27 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 68 T-203911 01-0011-01580 Lot 28 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 69 T-203912 01-0011-01581 Lot 29 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 70 T-203913 01-0011-01582 Lot 30 Block 63 Land 90 Prk. 3, Magatos, Asuncion, Davao Del Norte 71 T-203914 01-0011-01583 Lot 31 Block 63 Land 150 Prk. 3, Magatos, Asuncion, Davao Del Norte 72 T-203915 01-0011-01584 Lot 32 Block 63 Land 95 Prk. 3, Magatos, Asuncion, Davao Del Norte 73 T-203916 01-0011-01585 Lot 33 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 74 T-203917 01-0011-01611 Lot 34 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 75 T-203918 01-0011-01598 Lot 35 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 76 T-203919 01-0011-01611 Lot 36 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 77 T-203920 01-0011-01612 Lot 37 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 78 T-203921 01-0011-01629 Lot 38 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 79 T-203922 01-0011-01630 Lot 39 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 80 T-203923 01-0011-02249 Lot 40 Block 63 Land 80 Prk. 3, Magatos, Asuncion, Davao Del Norte 81 T-203981 01-0011-01633 Road Lot 53 Land 355 Prk. 3, Magatos, Asuncion, Davao Del Norte 82 T-203980 01-0011-01632 Road Lot 52 Land 367 Prk. 3, Magatos, Asuncion, Davao Del Norte It is further represented that pursuant to Sangguniang Bayan Resolution No. 2009-013 dated 26 February 2009, Municipal Mayor Joseph Nilo F. Parreas was granted authority to sign for and in behalf of the Local Government Unit of Asuncion, the Deed of Conditional Donation dated 23 March 2009 and a Conditional Deed of Donation (Supplemental) dated 13 October 2009 between Alberto M. Soriano, as the donor and the Municipality of Asuncion, as the donee, wherein the donor voluntarily transfers by way of donation the aforementioned real properties shall be used exclusively for and as a site of the Housing Project of the Municipality of Asuncion and Gawad Kalinga Community Development Foundation, Inc. which shall be known as AMS-LGU Asuncion Gawad Kalinga Village. In support of your request, you have completely submitted on December 4, 2012 the following documents: 1) Letter Request for Tax Exemption; 2) Certified true copies of Transfer Certificate of Titles; 3) Certified true copies of Tax Declarations; 4) Certified true copies of Deed of Conditional Donation dated 23 March 2009 and a Conditional Deed of Donation (Supplemental) dated 13 October 2009; and 5) Certified true copy of Resolution No. 2009-013. In reply, please be informed that Section 101 (A) (2) of the Tax Code of 1997, as amended, provides: "Section 101. Exemption of Certain Gifts . The following gifts or donations, shall be exempt from the tax ...: (A) In the Case of Gifts Made by a Resident. xxx xxx xxx (2) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government; and TCIEcH xxx xxx xxx." Applying the foregoing provision, this Office confirms your opinion that the donation by Alberto M. Soriano to the Municipality of Asuncion, as a political subdivision of the Government, is exempt from donor's tax in view of Section 101 (A) (2),which provides that gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government shall be exempt from tax. (BIR Ruling No. 381-11 dated October 20, 2011; BIR Ruling No. 206-11 dated July 1, 2011; and BIR Ruling No. 175-11 dated May 27, 2011) Moreover, the aforesaid Deed of Donation is not subject to documentary stamp tax under Section 196 of the Tax Code of 1997 but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same Code. However, the Revenue District Office having jurisdiction over Alberto M. Soriano is not precluded from investigating the donor, to verify if the property herein donated formed part of the assets reported on its books of accounts and financial statements. 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. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue