BIR Ruling No. 311-14

August 4, 2014 BIR RULING NO. 311-14 Section 101 (A) (2) of the Tax Code of 1997, as amended; BIR Ruling No. 048-2010 Norma Bana Vda. De Miranda Manatal, Pandi Bulacan Madam : This refers to your letter dated June 6, 2013, received by this Office on September 24, 2013 by way of 1st Indorsement dated September 17, 2013 from Revenue Region No. 05, Caloocan City, requesting exemption from the donor's tax on the donation of a parcel of land which you have made in favor of Barangay Manatal, Pandi, Bulacan. Documents submitted disclosed that Norma Bana Vda. De Miranda (hereinafter referred to as the "Donor") owned a parcel of land covered by Transfer Certificate of Title (TCT) No. T-512869 (M) of the Registry of Deeds for Bulacan, Meycauayan Branch, located at Brgy. Manatal, Pandi, Bulacan, containing an area of Nine Hundred Fifty One (951) square meters, more or less, and particularly described as follows: TCT No. T-512869 (M) "A parcel of land (Lot 2785-E-2-F-9-B of the Subd. Plan Psd-03-160815, being a portion of lot 2875-E-2-F-9, Psd-03-120673 L.R.C. Rec. No.), situated in the Barrio of Manatal, Mun. of Pandi, Prov. of Bulacan, Isl. of Luzon. Beginning at . . . containing an area of Nine Hundred Fifty One (951) sq.m., more or less . . ." that on March 1, 2009, the Donor executed the Kasulatan ng Pagkakaloob (Deed of Donation) in favor of Barangay Manatal, Pandi, Bulacan (hereinafter referred to as the "Donee") conveying to the latter the above-described parcel of land for the purpose of a "Right of Way" of Barangay Manatal, which donation was duly ratified by the Donee in Kapasyahan Blg. 12, Serye 2013. CacISA In reply, please be informed that Section 101 (A) (2) of the Tax Code of 1997, as amended, provides that: "SEC. 101. Exemption of Certain Gifts. The following gifts or donations shall be exempt from the tax provided for in this Chapter: 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; xxx xxx xxx" In view of the foregoing, since the donation is made to or for the use of the Barangay Manatal, Pandi, Bulacan, which is a political subdivision of the Government, the aforementioned donation of a parcel of land is exempt from the payment of donor's tax pursuant to Section 101 (A) (2) of the Tax Code of 1997, as amended. 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 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. 048-2010 dated September 1, 2010) 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