BIR Ruling No. 429-11

November 4, 2011 BIR RULING NO. 429-11 Section 101 (A) (3) Tax Code of 1997; BIR Ruling No. 452-93; BIR Ruling No. 252-93; and BIR Ruling No. DA-028-98 St. Louis University A. Bonifacio St., 2600 Baguio City Attention: Arturo C. Calwag Gentlemen : This refers to your letter dated 7 March 2011 requesting for the issuance of a Certificate of Tax Exemption from Donor's Tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, as amended. It is represented that CICM Mission Seminaries, Inc. (donor) is a non-stock and non-profit religious institution with Tax Identification No. 001-648-024-000; that the donor is the lawful owner in fee simple of a parcel of land with improvements situated at Res. Sec. "B", Baguio City, containing an area of one thousand fifty eight (1,058) Square Meters more or less covered by Transfer Certificate of Title No. T-21567; that Saint Louis University (donee) is a non-stock and non-profit educational institution organized in accordance with the law and registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 013217; and that for and in consideration of the Donor's mission-vision to extend its support and assistance to religious educational institutions being their arm in the fulfillment of their educational apostolate, a deed of donation was executed on 14 February 2011 donating the above-described property to the donee. In reply, please be informed that gifts in favor of educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization is exempt from the payment of the 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 thirty percent (30%) of said gift shall be used by the donee for administration purposes. (BIR Ruling No. 452-93 dated November 19, 1993) HCEaDI Inasmuch as St. Louis University, Inc. is an educational institution, any donation to it is exempt from the payment of donor's tax pursuant to the above provisions of the Tax Code 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 because failure to comply with the said condition shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. 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 likewise 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 Nos. 252-93 dated January 17, 1993 and DA-028-98 dated January 29, 1998) 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