BIR Ruling No. 381-11

October 20, 2011 BIR RULING NO. 381-11 Section 101 (A) (2) NIRC; BIR Ruling No. 122-99 Lhuillier & Herrera Realty Development Corporation 821 J. P. Rizal St. cor. Spring St. Poblacion, Makati City Attention: Jonathan U. Pantaleon Gentlemen : This refers to your letter dated August 5, 2011 requesting a ruling that the donation of a parcel of land, covered by Transfer Certificate of Title (TCT) No. T-159216 of the Registry of Deeds for the Province of Cebu and located at Brgy. Buac, Bogo City, made by Lhuillier & Herrera Realty Development Corporation ("Corporation") in favor of the City Government of Bogo City, is exempt from donor's tax pursuant to Section 101 (A) (2) of the 1997 Tax Code, as amended. In reply, please be informed that Section 101 (A) (2) of the Tax Code of 1997, as amended, provides for the exemption of donations made in favor of the local government units, viz.: "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;" . . . Based on the foregoing, since the donation of the subject parcel of land was made by the Corporation in favor of the City Government of Bogo City, a political subdivision of the National Government, said donation is exempt from donor's tax. (BIR Ruling No. 178-11 dated May 27, 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