BIR Ruling No. 221-14

June 20, 2014 BIR RULING NO. 221-14 Section 101 (A) (3) of the Tax Code of 1997, as amended; BIR Ruling No. 094-2010 R. Lambino Law Firm Unit 201-B Times Square Building 57 Examiner cor. Times Street West Triangle, Quezon City Attention: Atty. John Carlo Sadian Legal Counsel Gentlemen : This refers to your letter dated 5 November 2013 requesting exemption from donor's tax relative to the donation of a parcel of land executed by and between the Daughters of the Sacred Heart-Nuzzo, Inc. and Figlie Del Sacro Cuor Malta De Filipinas, Inc. both religious corporations duly registered with the Securities Exchange Commission (SEC). Documents submitted show that donor Daughters of the Sacred Heart-Nuzzo, Inc. with Taxpayer Identification No. 007-243-981, is a religious corporation duly registered with the SEC with Company Registration No. CN200901986 dated 12 February 2009. Moreover, donee, Figlie Del Sacro Cuor Malta De Filipinas, Inc. with Taxpayer Identification No. 007-619-722, is also a religious corporation duly registered with the SEC with Company Registration No. CN201002654 dated 23 February 2010. On 30 September 2013, the Daughters of the Sacred Heart-Nuzzo, Inc. , through Sr. Paola Farrugia, executed a Deed of Donation Inter Vivos in favor of the Figlie Del Sacro Cuor Malta De Filipinas, Inc. over a parcel of land, situated in Cubao, Quezon City and covered by Transfer Certificate of Title No. N-331746 of the Registry of Deeds for Quezon City. In reply, please be informed that Section 101 (A) (3) of the Tax Code of 1997, as amended, provides that: ISaTCD "SEC. 101. Exemption of Certain Gifts. The following gifts or donations shall be exempt from the tax provided for in this Chapter: xxx xxx xxx (A) In the Case of Gifts Made by a Resident xxx xxx xxx (3) Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization: Provided, however, That not more than thirty percent (30%) of said gifts shall be used by such donee for administration purposes. For the purpose of this exemption, a 'non-profit educational and/or charitable corporation, institution, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization' is a school, college or university and/or charitable corporation, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization, incorporated as a non-stock entity, paying no dividends, governed by trustees who receive no compensation, and devoting all its income, whether student's fees or gifts, donation, subsidies or other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation. xxx xxx xxx In view of the foregoing, since the donation is made to or for the use of Figlie Del Sacro Cuor Malta De Filipinas, Inc., a religious corporation, the aforementioned donation of a parcel of land, situated in Cubao, Quezon City and covered by Transfer Certificate of Title No. N-331746 of the Registry of Deeds for Quezon City is exempt from the payment of donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, as amended, provided, however, that not more than 30% of the gifts shall be used by the donee for administration purposes. Moreover, Section 185 of Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulations, implementing Title VII of the Tax Code, provides that conveyances of realties not in connection with a sale, to trustees or other persons without consideration are not taxable. Accordingly, the deed of donation is not subject to the documentary stamp tax prescribed under Section 196 of the Tax Code, as amended, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Code. (BIR Ruling No. 094-2010 dated October 6, 2010) EHTSCD This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained 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