BIR Ruling No. 163-14

May 30, 2014 BIR RULING NO. 163-14 Sec. 101 (A) (2) of the Tax Code of 1997, as amended; BIR Ruling No. 283-12; BIR Ruling No. 175-11; BIR Ruling No. 387-11; BIR Ruling No. 300-11 RSL Property Development Corp. (Formerly RML Realty & Development Corp.) 411 Shaw Boulevard, Mandaluyong City Attention: Ms. Martina C. Bautista Corporate Secretary Gentlemen : This refers to your letter dated March 25, 2013, requesting for exemption from the payment of Donor's Tax, pursuant to Section 101 (A) (2) of the National Internal Revenue Code (NIRC) of 1997, as amended, on the donation to the Municipality of Oton, Iloilo. It is represented that RSL PROPERTY DEVELOPMENT CORPORATION, a corporation duly organized and existing under the laws of the Philippines, with office address at No. 411 Shaw Boulevard, Mandaluyong City, with Taxpayer's Identification No. 001-180-589-000, is the owner/developer of a certain subdivision project denominated as "ROYAL PINES ANHAWAN" located at Brgy. Poblacion, Oton, Iloilo; that the said owner/developer is also the registered owner of parcels of land, covered by the following Transfer Certificates of Title (TCT):T-217704; T-217705; T-217706; T-217707; T-217700; T-217679; T-217663; T-217664; and T-217692; issued by the Registry of Deeds for the Province of Iloilo and all are located at Brgy. Poblacion, Municipality of Oton, Province of Iloilo, Island of Panay; that on February 27, 2013, a Deed of Donation was executed by RSL PROPERTY DEVELOPMENT CORPORATION, as the owner/developer, in favor of the Municipality of Oton, the following identified roads, alleys, sidewalks, and playground of said subdivision project, pursuant to Section 31 of Presidential Decree (PD) No. 957 entitled 'The Subdivision and Condominium Buyer's Protective Decree',hereunto particularly described as follows: (1.) Transfer Certificate of Title (TCT) No. T-217704 EacHCD Identified as (Road Lot 3, Pcs-06-004415, being a cons.-subdivision of Lots 169-A & +69-B, Psd-29472; Lot-B-2, Psd-008866 and 168, Iloilo Cad. 26),bounded on the N.,along lines 1-2-3-4-5, all of Block 5; on the E.,along line 5-6 by Road Lot 6 (8.00 m. wide);on the S.,& W.,along lines 6-7-8-9-10-1, all of Block 3. Beginning at a point marked "1" on plan being, S. 12-04 W.,677.29 meters from BBM # 60 Cad. 26, Iloilo Cad thence. N. 86-28 E.,92.73 m. to pt. 2; N. 72-14 E.,2.95 m. to pt. 3; N. 43-46 E.,2.95 m. to pt. 4; N. 15-19 E.,2.95 m. to pt. 5; N. 01-05 W.,20.07 m. to pt. 6; N. 14-41 W.,3.26 m. to pt. 7; N. 46-14 W.,3.26 m. to pt. 8; N. 77-46 W.,3.26 m. to pt. 9; S. 86-28 W.,91.11 m. to pt. 10; N. 03-32 W.,8.00 m. to pt. 1; point of beginning. Containing an area of EIGHT HUNDRED THREE (803) SQUARE METERS, more or less. All corners referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms.;bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. (2.) Transfer Certificate of Title (TCT) No. T-217705 Identified as a parcel of land (Road Lot 4, Pcs-06-004415, being a cons.-subd. of lots 169-A & 159-B, Psd-29472; Lot 170-B-2, Psd-06-008866 and 168, Iloilo Cad. 26),bounded on the N.,along lines 1-2-3-4, all of Block 1; along line 4-5 by Road Lot 1 (10.00-12.00 m. wide),along lines 5-6-7-8-9, all of Block 3; on the E.,along line 9-10 by Road Lot 6 (8.00 m. wide);on the S.,along lines 10-11-12-13-14, all of Block 2; along line 14-15 by Road Lot 5 (8.00 m. wide);on the S.,& W.,along lines 15-16-1 by Lot 5, 31, Block 1. Beginning at a point marked "1" on the plan being, S. 15-58 W.,745.07 meters from BBM #60, Cad. 26, Iloilo Cad. thence. N. 86-28 E.,49.02 m. to pt. 2; N. 75-55 E.,2.93 m. to pt. 3; N. 54-49 E.,2.93 m. to pt. 4; N. 86-41 E.,18.97 m. to pt. 5; N. 86-28 E.,82.05 m. to pt. 6; N. 72-14 E.,2.95 m. to pt. 7; N. 43-47 E.,2.95 m. to pt. 8; N. 15-19 E.,2.95 m. to pt. 9; S. 01-05 W.,22.07 m. to pt. 10; N. 14-41 W.,3.26 m. to pt. 11; N. 46-13 W.,3.26 m. to pt. 12; N. 77-48 W.,3.26 m. to pt. 13; S. 86-28 W.,126.27 m. to pt. 14; S. 86-28 W.,20.00 m. to pt. 15; S. 86-26 W.,7.37 m. to pt. 16; N. 03-32 W.,8.00 m. to pt. 1; point of beginning. Containing an area of ONE THOUSAND FIVE HUNDRED TWENTY TWO (1,522) SQUARE METERS, more or less. All corners referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms; bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. IcEACH (3.) Transfer Certificate of Title (TCT) No. T-217706 A parcel of land (Road Lot 5, Pcs-06-004415, being a cons.-subd. of Lots 169-A & 169-B, Psd-29472, Lot 170-B-2, Psd-06-008866 and 168, Iloilo Cad. 26),bounded on the E.,along line 1-2 by Lot 9 (Open Space);on the SW.,& NW.,along lines 2-3-4-5-6-7-8-9-10-11-12-13-14 all of block 1; on the NW.,along line 14-15 by Road Lot 4 (8.00-10.00 m. wide);on the NE.,along lines 15-16-17-18-19-20-21-22-23, all of Block 2; along line 23-24 by Road Lot 6 (8.00 m. wide);along line 24-1 by lot 1, Block 4. Beginning at a point marked "1" on the plan being 02-00 W.,754.39 meters from BBM # 60, Cad. 26, Iloilo Cad. thence. S. 01-05 W.,8.00 m. pt. 2; N. 88-55 W.,7.33 m. to pt. 3; S. 86-25 W.,137.72 m. to pt. 4; S. 87-18 W.,4.00 m. to pt. 5; N. 84-32 W.,4.38 m. to pt. 6; N 66-32 W.,4.38 m. to pt. 7; N. 48-32 W.,4.38 m. to pt. 8; N. 30-32 W.,4.38 m. to pt. 9; N. 12-32 W.,4.38 m. to pt. 10; N. 08-32 W.,29.00 m. to pt. 11; N. 18-32 W.,2.59 m. to pt. 12; N. 48-32 W.,2.59 m. to pt. 13; N. 78-32 W.,2.59 m. to pt. 14; N. 86-28 E.,20.00 m. to pt. 15; S. 11-28 W.,3.62 m. to pt. 18; S. 03-32 E.,26.00 m. to pt. 19; S. 18-32 E.,3.62 m. to pt. 20; S. 48-32 E.,3.62 m. to pt. 21; S. 78-32 E.,3.62 m. to pt. 22; N. 86-28 E.,124.01 m. to pt. 23; N. 86-53 E.,19.57 m. to pt. 24; S. 88-55 E.,5.11 m. to pt. 1; point of beginning. Containing an area of ONE THOUSAND SIX HUNDRED FOURTEEN (1,614) SQUARE METERS, more or less. All corners referred to are indicated on plan and marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms. bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. (4.) Transfer Certificate of Title (TCT) No. T-217707 A parcel of land (Road Lot 6, Pcs-06-004415, being a cons.-subd. of Lots 169-A & 169-B, Psd-29472, Lot 170-B-2, Psd-06-008866 and 168, Iloilo Cad. 26.),bounded on the N.,along line 1-2 by Lot 8 (open space),Block 5, on the E.,along lines 2-3-4-5-6, all of Block 4; on the S.,along lines 7-8-9-10-11 by Lot 14, 13, Block 2; along line 11-12 by Road Lot 4 (8.00-10.00 m. wide);along line 12-13 by Lot 11, 12 Block 3; along 13-14 by Road Lot 3 (8.00 m. wide),along line 14-1 by Lot, block 5; Beginning at a point marked "1" on the plan being, S. 03-52 W.,640.66 meters from BBM # 60. Cad. 26, Iloilo cad. thence. N. 86-28 E.,8.03 m. to pt. 2; S. 01-05 W.,109.03 m. to pt. 3; S. 13-55 E.,3.11 m. to pt. 4; 43-55 E.,3.11 m. to pt. 5; S. 73-55 E.,3.11 m. to pt. 6; S. 86.53 W.,19.57 m. to pt. 7; N. 72.14 E.,2.95 m. to pt. 8; N. 43-47 E.,2.95 m. to pt. 9; N. 15-19 E.,2.95 m. to pt. 10; N. 01-05 E.,28.09 m. to pt. 11; N. 01-05 E.,22.07 m. to pt. 12; N. 01-05 E.,28.09 m. to pt. 13; N. 01-05 E.,20.07 m. to pt. 14; N. 01-05 E.,11.52 m. to pt. 1; point of beginning. Containing an area of NINE HUNDRED FORTY TWO (942) SQUARE METERS, more or less. All corners referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cm. bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. ATHCDa (5.) Transfer Certificate of Title (TCT) No. T-217700 A parcel of land (Lot 3 Block 4, Pcs-06-004415, being a cons.-subd. of lots 169-A & 169-B, Psd-29472; Lot 170-B-2, Psd-06-008866 and 168, Iloilo Cad. 26),bounded on the NE.,along line 1-2 by lot 3 of this subd. survey; on the SE.,along lines 2-3-4 by lot 167, cad. 26, Iloilo Cadastre; on the SW.,along line 4-5 by Lot 2; on the NW.,along line 5-1 by Road lot 6, (3.00 m. wide) both of this subd. survey. Beginning at a point marked "1" on the plan being, S. 02-58 W.,703.63 meters from BBM # 60, Cad. 26, Iloilo Cad. thence. S. 33-55 E.,17.84 m. to pt. 2; S. 00-22 E.,6.43 m. to pt. 3; S. 01-05 W.,11.62 m. to pt. 4; N. 88-55 W.,18.00 m. to pt. 5; N. 01-05 E.,18.04 m. to pt. 1; point of beginning. Containing an area of THREE HUNDRED TWENTY FOUR (324) SQUARE METERS, more or less. All corners referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms.;bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. (6.) Transfer Certificate of Title (TCT) No. T-217679 A parcel of land (Lot 15 Block 2, Pcs-004415, being a cons.-subd. of Lots 169-A & 169-B, Psd-29472; Lot 170-B-2, Psd-06-008866 and 168, Iloilo Cad. 26),bounded on the E.,along line 1-2 by lot 6, on the S.,along line 2-3 by Road Lot 5 (8.00 m. wide),on the W.,along line 3-4 by Lot 4, along line 4-5 by Lot 3, on the along line 5-6 by Road Lot 4 (8.00-10.00 m. wide),on the E.,along line 0-1 by Lot 5, all of this subd. survey. Beginning at a point marked "1" on the plan being S. 09-35 W.,749.90 meters from BBM # 60, Cad. 26, Iloilo Cad. thence. S. 03-32 E.,20.00 m. to pt. 2; S. 80-28 W.,23.16 m. to pt. 3; N. 03-32 W.,20.00 m. to pt. 4; N. 03-32 W.,20.00 m. to pt. 5; N. 80-28 E.,23.16 m. to pt. 6; S. 03-32 E.,20.00 m. to pt. 1; point of beginning. Containing an area of NINE HUNDRED TWENTY SIX (926) SQUARE METERS, more or less. All corners referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms.;bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. (7.) Transfer Certificate of Title (TCT) No. T-217663 ESDHCa A parcel of land (Lot 30, Block 1 (Alley),Pcs-06-004415, being a cons.-subd. of Lots 169-A & 169-B, Psd-29472, Lot-B-2, Psd-06-008866 & 168, Iloilo Cad. 26),bounded on the S.,along line 1-2 by existing Road (port of Anjauan River before),on the W.,along line 2-3 by Lot 24, along line 3-4 by Lot 12, on the N.,along line 4-5 by Road Lot 5 (8.00 m. wide),on the E.,along line 5-6 by Lot 13, along line 6-1 by Lot 23, all of this subd. survey. Beginning at a point marked "1" on the plan being S. 08-49'W.,810.08 m. from BBM # 60, Cad. 26, Iloilo Cad.,thence; S. 86-28'W.,3.01 m. to pt. 2; N. 03-32'W.,14.97 m. to pt. 3; N. 03-32'W.,18.00 m. to pt. 4; N. 86-25'E.,3.00 m. to pt. 5; S. 03-32'E.,18.00 m. to pt. 6; S. 03-32'E.,14.98 m. to pt. 1. Containing an area of NINETY NINE (99) SQUARE METERS, more or less. All corners referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cm. bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. (8.) Transfer Certificate of Title (TCT) No. T-217664 A parcel of land (Lot 31, Block 1, Pcs-06-004415, being a cons.-subd. of Lots 169-A & 169-B, Psd-29472, Lot 170-B-2, Psd-06-008866 & 168, Iloilo Cad. 26),bounded on the N.,along line 1-2 by Lot 4, on the E.,along line 2-3 by Road Lot 4 (8.00-10.00 m. wide),on the S.,along line 3-4 by Lot 5, on the W.,along line 4-1 by Lot 28, all of this subd. survey. Beginning at a point marked "1" on the plan being S. 16-07'W.,745.74 m. from BBM # 60, Cad. 26, Iloilo Cad.,thence. N. 86-28'E.,2.00 m. to pt. 2; S.03-32'E.,8.00 m. to pt. 3; S. 86-28'W.,2.00 m. to pt. 4; N. 03-32'W.,8.00 m. to pt. 1; point of beginning. Containing an area of SIXTEEN (16) SQUARE METERS, more or less. All corners referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms. bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on Nov. 7 to Dec. 5, 2004 and approved on July 15, 2005. (9.) Transfer Certificate of Title (TCT) No. T-217692 A parcel of land (Lot 13 Block 3, Pcs-06-004415, being a cons. Subd. of Lots 169-A & 169-B, Psd-29472, Lot 170-B-2, Psd-06-008866 and 168, Iloilo Usd. 26),situated in the Barangay of Poblacion Municipality of Oton, province of Iloilo, island of Panay. Bounded on the S.,along line 1-2 by Lot 1, on the SW.,& NW.,along lines 2-3-4-5-6-7-8-9-10 by Road Lot 1) (10.00-12.00 m. wide),on the N.,along line 10-11 by Lot 7, on the S.,along line 11-12 by Road Lot 3 (8.00 m. wide),along line 12-1 by Lot 2 of this subd. survey. Beginning at the point marked "1" on the plan being S. 11-28 W.,704.29 meters from BBM # 60 Cad. 26 Iloilo Cad. thence. S. 26-28 W.,2.74 m. to pt. 2; N. 19-01 W.,6.05 m. to pt. 3; N. 15-49 W.,3.35 m. to pt. 4; N. 09-25 W.,3-35 m. to pt. 5; N. 03-01 W.,3.35 m. to pt. 6; N. 03-23 E.,3.35 m. to pt. 7; N. 09-47 E.,3.35 m. to pt. 8; N. 16-11 E.,3.35 m. to pt. 9; N. 19-23 E.,3.42 m. to pt. 10; S. 70-37 E.,1.87 m. to pt. 11; S. 03-32 E.,8.00 m. to pt. 12; S. 03-32 E.,20.00 m. to pt. 1; point of beginning. Containing an area of ONE HUNDRED TWENTY TWO (122) SQUARE METERS, more or less. All concerns referred to are indicated on plan and are marked on the ground by P.S. cyl. conc. mons. 15 x 40 cms.,bearings true; surveyed by Engr. Marilyn Y. Asuncion-Meneses on November 7 to December 5, 2004 and approved on July 15, 2005. EcHTCD On the other hand, the Municipality of Oton, Iloilo, is a political subdivision of the National Government. Section 31 of Presidential Decree No. 957, as amended by Presidential Decree No. 1216 requires that roads and open spaces for subdivisions reserved for parks, playground and recreational use and which are classified as non-alienable and non-buildable shall upon their completion, be donated by the developer or owner to the City or Municipality where it is located. The Sangguniang Bayan of the Municipality of Oton, Province of Iloilo passed and approved Resolution No. 2012-109, authorizing the Municipal Mayor to accept on behalf of the Municipality of Oton, Iloilo, the donation of road lots, including its alley and open spaces of Royal Pines Anhawan by way of a Deed of Donation and that the Municipality of Oton gratefully accepted the aforesaid donations as embodied in Sangguniang Bayan Resolution No. 2012-109. In reply, please be informed that under Section 101 (A) (2) of the Tax Code of 1997, as amended, 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 Government are exempt from donor's tax. Considering that the above donation of properties covered by Transfer Certificates of Title Nos. T-217704; T-217705; T-217706; T-217707; T-217700; T-217679; T-217663; T-217664; and T-217692, by RSL PROPERTY DEVELOPMENT CORPORATION was made in favor of the Municipality of Oton, a political subdivision of the National Government, therefore, the same is exempt from donor's tax. (BIR Ruling No. 175-11 dated May 27, 2011) Moreover, the Deed of Donation is not subject to documentary stamp tax. However, the acknowledgement on said Deed is subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997, as amended. (BIR Ruling No. 387-11 dated October 18, 2011 and BIR Ruling No. 300-11 dated May 12, 2011) Lastly, the Register of Deeds shall annotate the conditions and restrictions stated in the Deed of Donation at the back of the Transfer Certificates of Title because failure to comply with the particular terms therein shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil 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. AcDHCS Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue