BIR Ruling No. 189-12

March 21, 2012 BIR RULING NO. 189-12 Sections 101 (A) (3), 196 and 188 of the Tax Code of 1997, as amended; BIR Ruling No. 022-10 dated August 3, 2010 San Roque Power Foundation, Inc. Barangay San Roque, San Miguel, Province of Pangasinan 2438 Attention: Mr. Tommy T. Valdez Executive Director Gentlemen : This refers to your letter dated 17 August 2011 requesting for a ruling confirming that donations or gifts in favor of San Roque Power Foundation, Inc. (SRPFI) are exempt from 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 thirty percent (30%) of said donations or gifts shall be used for administration purposes. It is represented that SRPFI, with TIN 007-907-542-000, is a non-stock, non-profit domestic corporation registered with the Securities and Exchange Commission on October 21, 2010 and was issued SEC Registration No. CN201017349. Among the purposes for which SRFI was incorporated are the following: "1. To promote, support, and/or undertake local and national community and social development programs and projects designed to help improve quality of life and contribute to enhance economic development in the country and in this connection, to undertake or assist in the identification, planning and implementation of comprehensive and sustainable livelihood and rehabilitations projects by encouraging participation, providing access to resources and capability building. 2. To create, establish, organize and/or maintain centers, institutions, and programs which will provide or allow access to health services and educational opportunities. 3. To foster partnerships with communities, non-government organizations, government agencies, local government units and international organizations to work towards advancing social development in the country, and to actively participate in and support government and non-government organization programs promoting quality education, health care services, and the implementation of needs-based community infrastructure projects, e.g. , farm to market roads, rural electrification. acHDTA 4. To receive and/or give grants, gifts, legacies, donations, contributions, endowments, and financial aid or loans, to or from any sources whatsoever, and to make use of the foregoing in undertaking, operating and/or supporting enterprises, activities and businesses as may be necessary to carry out the objectives of the Corporation, including but not limited to conducting, undertaking, providing and/or supporting relief operations (including extending relief to the poor, distressed and underprivileged), educational assistance, leadership/capability building activities, environmental protection projects research studies to address current social issues and other similar activities. 5. Generally, to do all things, transact such business, exercise such powers and authority as may be directly or indirectly necessary, suitable, or proper for the accomplishment of any of the purposes or the attainment of any one or more of the objectives herein enumerated or which shall appear at any time conducive to or expedient for the protection or benefit of the Corporation; it being understood that the property and income of the Corporation shall be used, in accordance with the applicable rules and regulations, exclusively for the furtherance of the purposes enumerated herein or related thereto, and that no part of the property or income of the Corporation shall inure to the benefit of any private individual or person, it being further understood that the Corporation shall not engage in charitable activities under the jurisdiction of the Department of Social Welfare and Development without the latter's consent whenever such consent is required." On August 9, 2011, a "Deed of Donation" was executed by San Roque Power Corporation and SRPFI, wherein the former donated Five Million Pesos (P5,000,000.00) subject to the condition that the donation is not subject to donor's tax, otherwise the donation shall be considered automatically revoked by the San Roque Power Corporation without need of further action. In reply, please be informed that inasmuch as SRPFI is a social welfare corporation, the aforementioned donation is exempt from the payment of donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, subject to the condition that not more than thirty percent (30%) of said gift shall be used for administration purposes. (BIR Ruling No. 022-10 dated August 3, 2010) Moreover, the aforesaid Deed of Donation is not subject to documentary stamp tax under Section 196 of the Tax Code of 1997, as amended, but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same Code. (BIR Ruling No. 022-10 dated August 3, 2010) 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 as null and void. THaAEC Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue