BIR Ruling No. 377-13

October 10, 2013 BIR RULING NO. 377-13 Section 101 (A) (3), NIRC of 1997; BIR Ruling No. 225-11; BIR Ruling No. 241-11; BIR Ruling No. 471-11 Loon Law Office Riasjac Building, Baseline Complex Juana Osmea St., Cebu City Attention: Atty. Valeriano S. Loon Counsel Gentlemen : This refers to your letter dated 8 August 2012, requesting on behalf of your client, Cebu Bible Baptist Church, Inc. for the issuance of a Certificate of Tax Exemption from payment of donor's tax on the donation of parcel of land by Daniel J. Gloria to Cebu Bible Baptist Church, Inc. pursuant to Section 101 (A) (3) of the National Internal Revenue Code of 1997, as amended. EAIcCS Documents submitted disclosed that the Cebu Bible Baptist Church, Inc. , with Taxpayer Identification No. 001-481-392-000, is a non-stock, non-profit religious organization registered with the Securities and Exchange Commission under SEC Reg. No. 51625 dated 14 June 1973; that the purpose for which this religious corporation was incorporated is for the administration of its temporalities and management of its affairs; that on 23 July 2012, a Deed of Donation was executed by Daniel J. Gloria, resident of P. Rodriguez St., Bogo City Cebu, in favor of Cebu Bible Baptist Church, Inc. as donee of a parcel of land, particularly described as follows: " TCT No. 102-2012002135 A parcel of land under (Lot No. 1, Plan PSU-58462), with improvements thereon, situated in barrio of Hagnaya, Municipality of San Remigi, Province of Cebu. Bounded on the NE., by the Sea and Properties of Jacinto Ruedas and Pas Pestano; on the SE., by property of Pastor Pestano; on the SW., by properties of Francisco Ursal, Ponciano Ortega, Cosme Ursal and Ruperto Singor and on the NW., by Property of Apolonio Iray. . . . containing are area of Fifty Seven Thousand Eight Hundred Seventy Two Square Meters (57,872), more or less." Other documents submitted in support of your request are the following: 1. Original Copy of Tax Declaration of Real Property; 2. BIR Certificate of Registration (2303) of Cebu Bible Baptist Church, Inc.; 3. Certified True Copy of Cebu Bible Baptist Church, Inc.'s SEC Certificate of Incorporation; 4. Certified True Copy of Cebu Bible Baptist Church, Inc.'s Articles of Incorporation; 5. Certified True Copy of Cebu Bible Baptist Church, Inc.'s By-Laws; 6. Deed of Donation between Daniel J. Gloria and Cebu Bible Baptist Church, Inc.; 7. Transfer Certificate of Title No. 102-2012002135. In reply, please be informed that Section 101 (A) (3) 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: HcISTE (A) In 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-governmental organization, trust or philanthropic, 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 administrative purposes. . . ." Hence, inasmuch as the donee, Cebu Bible Baptist Church, Inc. , is a religious organization and that the donated properties are to be exclusively devoted for religious purposes, donation to it is exempt from the payment of donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, as amended, subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. In case of donation of real property, the Register of Deeds shall annotate this condition at the back of the title. Section 185 of Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulations, implementing Title VII of the NIRC, provides that conveyances of realties not in connection with a sale, to trustees or other persons without consideration are not taxable. (BIR Ruling No. 225-2011 dated July 13, 2011; BIR Ruling No. 241-2011 dated July 22, 2011) Accordingly, the deed of donation is likewise not subject to the documentary stamp tax prescribed under Section 196 of the Tax Code of 1997, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Tax Code. (BIR Ruling No. 225-2011 dated July 13, 2011; BIR Ruling No. 241-2011 dated July 22, 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. EaISTD Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue