BIR Ruling No. 165-12

March 9, 2012 BIR RULING NO. 165-12 Section 101 (A) (2), 101 (B) (1) NIRC; BIR Ruling No. 175-11 dated May 27, 2011 Philippine Overseas Employment Administration BFO Bldg. Ortigas Avenue cor. EDSA Mandaluyong City Attention: Carlos S. Cao, Jr. Administrator Gentlemen : This refers to your letter dated December 7, 2011, requesting clarification on the taxability of donations to be made in favor of the Philippine Overseas Employment Administration (POEA). In reply, please be informed that donations made in favor of the Government and any of its agencies which are not conducted for profit, or to any of its political subdivisions, are exempt from the payment of the donor's tax pursuant to the provisions of Section 101 (A) (2) and Section 101 (B) (1) of the Tax Code of 1997, as amended, which provides to wit: "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 (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; aHSTID xxx xxx xxx (B) In the Case of Gifts Made by a Nonresident not a Citizen of the Philippines. (1) 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." However, it is to be noted that this Office does not issue a certificate of general exemption. A ruling is issued on a per transaction and case to case basis. A taxpayer applying for tax exemption has to submit supporting documents i.e., Deed of Donation, Transfer Certificate of Title and Tax Declaration of the property donated, in case of donation of real property, together with a letter-request in order for this Office to assess and verify the transaction before it issues a ruling granting tax exemption. Thus, an application for tax exemption has to be made for each donation. Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue