Saint Mary's University of Bayombong

June 22, 2016 BIR RULING NO. 260-16 Section 101 (A) (3), NIRC of 1997; BIR Ruling No. 128-13; BIR Ruling No. 531-12; BIR Ruling No. 429-11 Saint Mary's University of Bayombong Ponce Street, Bayombong, Nueva Vizcaya Attention: Rev. Renillo H. Sta. Ana, CICM University President Gentlemen : This refers to your letters dated 31 May 2012 and 06 August 2012 requesting for the issuance of a Certificate of Tax Exemption from Donor's Tax on the donations of properties made by eight (8) CICM priests in favor of Saint Mary's University of Bayombong pursuant to Section 101 (A) (3) of the Tax Code of 1997, as amended. Documents submitted disclosed that the following CICM priests are the registered owners of the properties described below: Registered Owner/Donor TIN TCT NO. LOCATION AREA (sq.m.) Brgy. Municipality 1 Rev. Manuel D. Valencia 123-655-546 T-146511 Masoc Bayombong 38,909 2 Rev. Romeo G. Nimez 241-052-202 T-146512 Masoc Bayombong 22,490 3 Rev. Renillo H. Sta. Ana 938-160-299 T-146400 Masoc Bayombong 6,814 4 Rev. Jessie Hechanova 913-955-171 T-146403 Masoc Bayombong 30,000 5 Rev. Fernold G. Denna 413-137-610 T-146401 Masoc Bayombong 22,489 6 Rev. Fernold G. Denna 413-137-610 T-146405 Masoc Bayombong 19,960 7 Rev. Renillo H. Sta. Ana 938-160-299 T-146399 Masoc Bayombong 19,961 8 Rev. Jessie Hechanova 913-955-171 T-146398 Masoc Bayombong 19,961 9 Rev. Romeo G. Nimez 241-052-202 T-146404 Masoc Bayombong 18,696 10 Rev. Manuel D. Valencia 123-655-546 T-146402 Masoc Bayombong 7,830 11 Rev. Gilbert Sales 265-064-656 T-151826 Masoc Bayombong 17,513 12 Rev. Roderick Villamar 255-850-851 T-151828 Masoc Bayombong 14,621 13 Rev. Gilbert Sales 265-064-656 T-151827 Masoc Bayombong 15,020 14 Rev. Melanio Michael Reyes 413-137-610 T-151830 Masoc Bayombong 41,076 15 Rev. Roderick Villamar 255-850-851 T-151829 Masoc Bayombong 20,000 that Saint Mary's University of Bayombong (TIN: 000-542-627) is a non-stock and non-profit educational institution organized in accordance with the law and registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 3947; and that for and in consideration of the Donors' desire to help in the advancement of the cause of the donee, Deeds of donations over the above-described properties were executed on 26 August 2011 donating the above-described property to the donee; and that in support of your request, the following documents were submitted: HSAcaE 1) Certified true copies of the Deeds of Donations; 2) Copy of the BIR Certificate of Registration of Saint Mary's University of Bayombong and TINs of the Donors; 3) Certified true copies of the SEC Articles of Incorporation and By-Laws of Saint Mary's University of Bayombong; 4) Audited Financial Statement and Annual Income Tax Return of Saint Mary's University of Bayombong; 5) Affidavit of Undertaking; 6) Certified true copies of the titles; 7) Latest Tax Declarations of the properties; 8) Certificates of No-Improvement from the Provincial Assessor's Office; 9) Secretary's Certificate attesting the authority given by the Board of Trustees of Saint Mary's University of Bayombong; and 10) Verification and Certificate against forum-shopping. In reply, please be informed that Section 101 (A) (3) of the Tax Code of 1997, as amended, reads: "SEC. 101. Exemption of Certain Gifts . The following gifts or donations shall be exempt from the tax provided for in this Chapter: (A)vIn 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 non-government organization, trust or philanthropic (sic) 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 non-government organization, trust or philanthropic organization, and/or research institution or organization is a school, college or university and/or charitable corporation, accredited non-government 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 students' fees or gifts, donations, subsidies or other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation." Inasmuch as Saint Mary's University of Bayombong is a non-stock, 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. (BIR Ruling No. 531-12 dated August 29, 2012; BIR Ruling No. 429-11 dated November 4, 2011) Since these are donations of real properties, the Register of Deeds shall annotate this condition at the back of the titles because failure to comply with the said condition shall be a ground for the revocation of the exemption from payment of the donor's tax. (BIR Ruling No. 128-13 dated April 4, 2013) 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 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. 429-11 dated November 4, 2011) 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