BIR Ruling No. 283-12

April 25, 2012 BIR RULING NO. 283-12 Section 101 (A) (2), 188, and 196; BIR Ruling No. 498-2011 City Government of Marikina City Legal Office Sta. Elena, Marikina City Attention: Nancy Villanueva Teylan City Attorney Gentlemen : This refers to your letter dated May 4, 2010 requesting for a confirmation that the donation made by Chanyungco Development Corporation to the City Government of Marikina, of several parcels of land is exempt from donor's tax and documentary stamp tax. CSDAIa It is represented that Section 31 of Presidential Decree No. 957, as amended by Presidential Decree No. 1216 requires that roads and open spaces for subdivisions reserved for parks, playground and recreational use and which are classified as non-alienable and non-buildable shall upon their completion, be donated by the developer or owner to the City or Municipality where it is located; that the Sangguniang Panlungsod ng Marikina passed and approved Resolution No. 194, Series of 2002 authorizing the City Mayor to sign on and behalf of City Government of Marikina the Deed of Donation entered into and executed by and between the City Government of Marikina and Chanyungco Development Corporation; that in compliance with the aforesaid Presidential Decree and as an act of liberality and generosity, Chanyungco Development Corporation, the registered owner of several Road Lots and open space located at Barrio Bayanbayanan, Marikina City, donated to the City Government of Marikina eleven (11) parcels of land more particularly described as follows: 1) 1,000.50 sq. m. parcel of land located at Barrio of Bayanbayanan, Municipality of Marikina covered by TCT N-60821; 2) 79 sq. m. parcel of land located at Barrio of Bayanbayanan, Municipality of Marikina covered by TCT N-60822; 3) 165 sq. m. parcel of land located at Barrio of Bayanbayanan, Municipality of Marikina covered by TCT N-60823; 4) 1,415 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60930; 5) 5,042 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60931; 6) 1,416 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60932; 7) 1,416 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60933; SCEHaD 8) 2,696 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60934; 9) 121.50 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60935; 10) 220.50 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60936; and 11) 4,119 sq. m. parcel of land located at Bo. of Bayanbayanan, Municipality of Marikina covered by TCT N-60899. that the City Government of Marikina gratefully accepts the donation as embodied in the Deed of Donation dated March 30, 2010; and that in support of your request, you submitted the following documents: 1) Deed of Donation dated March 30, 2010; 2) Secretary's Certificate; 3) Transfer Certificates of Title Nos. N-60821, N-60822, N-60823, N- 60930, N-60931, N-60932, N-60933, N-60934, N-60935, N-60936, and N-60899; and 4) Resolution No. 194 Series of 2002 dated November 29, 2002. In reply, please be informed that Section 101 (A) (2) of the Tax Code of 1997, as amended, provides: "Section 101. Exemption of Certain Gifts. The following gifts or donations, shall be exempt from the tax . . .: (A) In the Case of Gifts Made by a Resident. xxx xxx xxx (2) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government; and DaHcAS xxx xxx xxx." The donation by Chanyungco Development Corporation to the City Government of Marikina is exempt from donor's tax in view of Section 101 (A) (2), which provides that gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government shall be exempt from tax. Moreover, the aforesaid Deed of Donation is not subject to documentary stamp tax under Section 196 of the Tax Code of 1997 but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same Code. (BIR Ruling No. 498-2011 dated December 15, 2011) 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