Exemption from the Donor's Tax

October 31, 1989 BIR RULING NO. 222-89 29 (h) (1) 94 (A) (3) 109-89 222-89 Gentlemen : This refers to your letter dated August 1, 1989 requesting exemption from the donor's tax of the donation made by Juan D. Nepomuceno Sons, Inc. consisting of a parcel of land covered by TCT No. 52403 situated in Angeles City in favor of the Holy Angel University, Inc. (formerly Holy Angel College, Inc.) by virtue of a Deed of Donation executed on July 28, 1989. It is represented that the Holy Angel University, Inc. is a non-stock, non-profit corporation as expressly provided for in its Articles of Incorporation as follows: "That the purpose for which said corporation is formed is to teach the arts and sciences and other studies embraced in high school and collegiate course of instruction; provided, that the corporation is not organized for the purpose of making profits for the benefit of any member thereof, and no portion of its net income shall inure to the benefit of any of its members, but shall be applied to the purposes for which the corporation is founded, as Board of Trustees may direct." that the Donee-School is managed by a Board of Trustees whose members do not receive any compensation from the school; that it pays no dividends and devotes all its income, whether student's fees or gifts, donations, subsidies or other forms of philanthropy, to the accomplishment and promotion of the principal purpose for which it was formed and organized; that the donated parcel of land will be used as school ground as well as site for future expansion programs to accommodate the ever growing population of the School; and that on January 27, 1982, the School then known as the Holy Angel College, Inc., was granted a Certificate of Registration No. 0790 as a tax-exempt donee under the provisions of BIR-NEDA Regulations No. 1-81. In reply, please be informed that gifts made in favor of a non-stock and non-profit educational institution within the contemplation of Section 94(a)(3) of the Tax Code as amended is exempt from the donor's tax provided that not more than thirty per centum of said gifts shall be used by such donee for administration purposes. Considering that the donee, Holy Angel University, Inc. is a non-profit and non-stock educational institution, the aforementioned donation is exempt from the payment of the donor's gift tax. cdt Very truly yours, (SGD.) JOSE U. ONG Commissioner