BIR Ruling No. 225-11

July 13, 2011 BIR RULING NO. 225-11 Section 101 (A) (3) Tax Code of 1997; BIR Ruling No. 452-93; BIR Ruling No. 252-93; BIR Ruling No. DA-028-98; BIR Ruling No. DA-118-2005 Fairview Fundamental Baptist Church, Inc. Fairview Park, Quezon City Attention: Rev. John Joseph Leo B. Castillo Executive Chairperson Gentlemen : This refers to your letter dated January 14, 2011, requesting in effect for exemption from the payment of donor's tax on the donation by Fundamental Baptist Church (FFBC) of a parcel of land to Fairview Baptist Academy (FBA). Documents submitted show that FFBC (TIN 00-762-401-000) is the owner of a parcel of land situated at Fairview/Capitol Hills Quezon City and evidenced by a certified true copy of Transfer Certificate No. 112919 particularly described as follows: "A parcel of land (Lot 2, Blk. 2, of the cons-subdn. Plan (LRC) Pcs-10656, being a portion of the cons. of Blk. 1, 2, 27 and Road Lots 1, 23 and 26, (LRC) Psd-95250, LRC Rec. No. 1037), situated in Quezon City, Is. of Luzon. Bounded on the N., points 7-1 by Lot 1; and points 1-2 by Lot 3; and on the E., points 2-3 by Lot 4, all of Blk. 2, on the S., points 3-5 by Road Lot 2; and on the W., points 5-7 by Road Lot 3, all of the cons-subdn. plan. Beginning at a point marked "1" on plan, being S. 68 deg. 12'W., 8143.33 m. from BLLM 1, Montalban, Rizal; thence EAST, 7.00 m. to point 2; thence South, 22.00 m. to point 3; thence West, 22.09 m. to point 4; thence N. 4 deg. 43'W., 4.01 m. to point 5; thence N. 3 deg. 25'W., 13.41 m. to point 6; thence S. 8 deg 45'W., 5.92 m. to point 7; thence East, 12.71 m. to point of beginning; containing an area of FIVE HUNDRED FIFTY NINE (559) SQ. METERS, more or less. All points referred to are indicated on the plan and are marked on the ground by PS cyl. conc. mons. 15x60 cm.; bearings true; date of the original survey, March 29-Nov. 15, 1921. is registered in accordance with the provisions of the Property Registration Decree in the name of FAIRVIEW FUNDAMENTAL BAPTIST CHURCH, a non-stock, non-profit corporation duly organized and existing under and by virtue of the laws of the Phils." cEHSTC Also submitted is the original copy of the Deed of Donation executed by the afore-named donor in favor of FBA (TIN 214-667-032-000), an educational institution duly registered with the Securities and Exchange Commission (SEC) under SEC Registration Certificate No. A200017490 dated December 29, 2000 and Department of Education Government Permit (NCR) No. E-052, R-8, S. 2010. Other documents submitted in support of your request are the following: 1. Certified True Copy of Tax Declaration of Real Property issued by the Office of the City Assessor of Quezon City dated December 7, 2010; 2. BIR Donor's Tax Return (1800) dated January 27, 2011; 3. BIR Certificate of Registration (2303) Fairview Fundamental Baptist Church dated January 1, 1997; 4. BIR Certificate of Registration (2303) Fairview Fundamental Baptist Academy, Inc. dated November 27, 2001; 5. Original Certified True Copy of FBA's 5.1. SEC Certificate of Incorporation 5.2. Articles of Incorporation 5.3. By-Laws 6. Original Certified True Copy of FFBC's 6.1. SEC Certificate of Incorporation 6.2. Articles of Incorporation 6.3. By-Laws In reply, please be informed that gifts in favor of educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization are exempt from the payment of the 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 gift shall be used by the donee for administration purposes. (BIR Ruling No. 452-93 dated November 19, 1993) Inasmuch as FBA is a non-stock and non-profit educational institution, any donation to it is exempt from the payment of donor's tax pursuant to the above provisions of the Tax Code subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. In case of donation of real property, the Register of Deeds shall annotate this condition at the back of the title because failure to comply with the said condition shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. 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. aHcACI Accordingly, the deed of donation is likewise 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. 252-93 dated January 17, 1993 and DA-028-98 dated January 29, 1998) 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. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue