BIR Ruling No. 320-13

August 27, 2013 BIR RULING NO. 320-13 Sections 101 (A) (2) and 196 of the Tax Code of 1997, as amended; BIR Ruling No. 478-2011 Department of Education Cordillera Administrative Region Division of Ifugao Lagawe District (Caba Elementary School) Caba, Lagawe, Ifugao Attention: Estela L. Carino School Division Superintendent Gentlemen : This refers to your letter dated 17 April 2012 requesting for Donor's Tax Exemption of the donation made in favor of the DEPARTMENT OF EDUCATION (CABA ELEMENTARY SCHOOL). It is represented that MARY TAWANA DIMI-ANG, with Tax Identification Number (TIN) 424-865-231, is the declared owner of an agricultural land covered by Tax Declaration ARP No. 2009-010010-00183 located at Caba Proper, Caba, Lagawe, Ifugao, with an area of 0.6424 hectares; and that for and in consideration of love and affection for the people of Caba, Lagawe, Ifugao, a "Deed of Absolute Donation of Portion of Land" was executed on 20 March 2012 by MARY TAWANA DIMI-ANG, as donor, donating a portion of the said agricultural land covering Eight Hundred Twenty Four (824) square meters in favor of the donee DEPARTMENT OF EDUCATION (CABA ELEMENTARY SCHOOL),with TIN 411-142-082-677, as represented by Estela L. Carino, in her capacity as School Division Superintendent. In support of its request, DEPARTMENT OF EDUCATION (CABA ELEMENTARY SCHOOL) submitted the following documents: 1) Duplicate original of "Deed of Absolute Donation of Portion of Land" dated 20 March 2012; 2) Certified true copy of Tax Declaration ARP No. 2009-010010-00183; 3) Certified electronic copy of Land Registration Authority Certification dated July 31, 2012; cTAaDC 4) Verification and Certification dated August 16, 2012; and 5) Copy of BIR Integrated Tax System print-out showing TIN of MARY TAWANA DIMI-ANG and DEPARTMENT OF EDUCATION (CABA ELEMENTARY SCHOOL). 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 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 xxx xxx xxx" Applying the foregoing provision, this Office confirms your opinion that the donation made by MARY TAWANA DIMI-ANG to the DEPARTMENT OF EDUCATION (CABA ELEMENTARY SCHOOL), as an agency of the National Government, is exempt from donor's tax in view of Section 101 (A) (2) of the Tax Code of 1997, as amended, 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. (BIR Ruling No. 478-2011 dated December 5, 2011) Moreover, the aforesaid "Deed of Absolute Donation of Portion of Land" 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 under Section 188 of the same Code. However, the Revenue District Office having jurisdiction over MARY TAWANA DIMI-ANG is not precluded from investigating the donor, to verify if the property herein donated formed part of the assets in her books of accounts and financial statements. 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