BIR Ruling No. 310-14

August 4, 2014 BIR RULING NO. 310-14 Section 101 (A) (2) of the Tax Code of 1997; BIR Ruling No. 283-12; BIR Ruling No. 206-11 Francisco A. Jarque No. 16, Bauhinia Drive, Banilad, Cebu City 6000 Sir : This refers to the Indorsement of the BIR Revenue District Office (RDO) No. 89-Ormoc City, Western Leyte, dated May 28, 2013, referring to this Office for the issuance of a Certificate of Tax Exemption of Donor's Tax the Deed of Donation by the heirs of Soledad V. Alvarez in favor of the Department of Public Works and Highways (DPWH) pursuant to Section 101 (A) (2) of the Tax Code of 1997, as amended. Documents submitted show that Carmen A. Larrazabal with Taxpayer's Identification No. (TIN) 440-117-003-000, Rita (aka Josefa) A. Garcia (TIN 434-539-269-000), Maria A. Suarez (TIN 439-869-341-000), Ma. Luz A. Rama (TIN 420-490-643-000), Eduardo A. Jarque (TIN 138-432-083-000), Francisco A. Jarque (TIN 108-444-781-000), Ana Fe Jarque-Lujan (TIN 290-525-221-000), Ramon A. Jarque (TIN 106-101-464-000), Adela Magdalena A. Jarque (TIN 214-698-901-000), and Pilar Jarque-Loop (TIN 108-444-815-000), (collectively referred to as "Donors") are the heirs of Soledad V. Alvarez who died without issue; that the Donee, Department of Public Works and Highways (DPWH) , is a National Government Agency, with Regional Office located at Government Center, Baras, Palo, Leyte, and is represented by its Regional Director, Rolando M. Asis; that the Donors are now the co-owners of a parcel of land located at Tabango, Leyte which they inherited from Soledad V. Alvarez, more particularly described and bounded as follows: HSIaAT Lot No. B-1-N with an area of FOURTEEN THOUSAND THREE HUNDRED TWENTY SEVEN (14,327) SQUARE METERS of the subdivision plan Psd-08-009426-D, being a portion of Lot No. B-1 covered by Transfer Certificate of Title No. T-7325 issued by the Registry of Deeds for the Province of Leyte containing an area of 567,725 sq.m. more or less. that on June 29, 2012, a Deed of Donation was executed by and between the Donors and DPWH, Regional Office No. VIII, over the afore-mentioned parcel of land; that the property herein donated shall be exclusively used as a site for the national road to benefit principally the public commuters and other road users; and that in conformity with the intention of the late Soledad V. Alvarez who had then made a verbal donation over a portion of her real property to the national government to be used as national road, the Donors have offered to donate the road lot above-mentioned; and that the Donee accepted the donation under the conditions set forth as embodied in the same Deed of Donation. In reply, please be informed that Section 101 (A) (2) of the Tax Code of 1997, as amended, provides: "SEC. 101. Exemption of Certain Gifts . The following gifts or donations shall be exempt from the tax provided for in this chapter: (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;" DACcIH xxx xxx xxx According to the above, donations made 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 the donor's tax. Considering that the donation of road lot was made by the Donors in favor of the Department of Public Works and Highways, a National Government Agency, said donation is exempt from donor's tax. (BIR Ruling No. 206-11 dated July 1, 2011) Moreover, the aforesaid Deed of Donation is not subject to documentary stamp tax under Section 196 of the Tax Code of 1997, as amended, but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same Code. (BIR Ruling No. 283-2012 dated April 25, 2012) It is understood that this ruling is never intended and shall not be construed as giving authority to the Register of Deeds of Tacloban, Leyte, to effect transfer of the land title in the name of the donee without the necessary certificate of authority to register issued by this Bureau. In this regard, this ruling shall be presented to the RDO No. 89, Revenue Region No. 14, Palo, Leyte, in order for the latter to issue the Certificate Authorizing Registration (CAR). The CAR shall only be issued after the submission of the requirements provided under RMO 15-2003. 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