BIR Ruling No. 447-13

November 27, 2013 BIR RULING NO. 447-13 Section 101 (A) (3), NIRC of 1997; BIR Ruling No. 225-11; BIR Ruling No. 241-11; BIR Ruling No. 471-11 The Roman Catholic Archbishop of Manila 121 Arzobispo Street, Intramuros P.O. Box 132 Manila, Philippines Attention: Rev. Fr. Domingo G. Asuncion Head/Director, Properties Administration Department Gentlemen : This refers to your letter dated 17 August 2012, requesting on behalf of the Roman Catholic Bishop of Novaliches, Inc. , a certificate of exemption from the payment of donor's tax relative to the donation made by Jose E. Desiderio & Co., Inc. to the latter. Documents submitted disclosed that the Roman Catholic Bishop of Novaliches, Inc. , with Taxpayer Identification No. 228-877-795-000, is a non-stock, non-profit religious organization registered with the Securities and Exchange Commission under SEC Reg. No. CN200305075 dated March 4, 2003; that the purpose for which this religious corporation was incorporated is for the administration of its affairs, properties and temporalities; that the Jose E. Desiderio & Co., Inc. is a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines under SEC Reg. No. 16389; that on January 30, 2002, an Agreement of Conditional Donation was entered into between Jose E. Desiderio & Co., Inc. (Jose E. Desiderio, Inc. in the Agreement) and Roman Catholic Archbishop of Manila wherein a property, registered under Transfer Certificate of Title No. RT-90688 (174553) would be donated to the Roman Catholic Archbishop of Manila under the condition that the latter construct on the premises a Catholic Church to serve as the "The Archdiocesan Shrine of the Most Holy Trinity" in accordance with the plans and specifications of the architect, Augusto Concio, duly appointed by the Roman Catholic Archbishop of Manila, and other conditions set forth in Section Three of the Agreement of Conditional Donation; and that on June 6, 2012, after compliance by the donee of the said conditions, a Deed of Donation was executed by Jose E. Desiderio & Co., Inc. (Jose E. Desiderio, Inc. in the Deed), in favor of Roman Catholic Bishop of Novaliches, Inc. as donee for the said parcel of land pursuant to Board Resolution No. 002-2012 of the Board of Directors of Jose E. Desiderio & Co., Inc. : cSIADa "RESOLVED FURTHER: that as represented by the Catholic Archbishop of Manila thru its Properties Administration Department Manager Mr. Antonio B. Ramirez in a letter dated 01 February 2010, in the year 2005, the Archdiocese of Manila was divided into five, the Archdiocese of Manila and the Suffragan Dioceses of Pasig, Paraaque, Cubao and Novaliches. These Dioceses are now in charge in (sic) all the properties under their jurisdiction with the subject property under the jurisdiction of the Diocese of Novaliches." Other documents submitted in support of your request are the following: 1. Original Copy of Tax Declaration of Real Property issued by the Office of the City Assessor of Quezon City; 2. BIR Certificate of Registration (2303) of Roman Catholic Bishop of Novaliches, Inc. dated January 28, 2004; 3. Certified True Copy of Roman Catholic Bishop of Novaliches, Inc.'s SEC Certificate of Incorporation; 4. Certified True Copy of Roman Catholic Bishop of Novaliches, Inc.'s Articles of Incorporation; 5. Deed of Donation between Jose E. Desiderio & Co., Inc. and Roman Catholic Bishop of Novaliches, Inc. ; and 6. Agreement of Conditional Donation between Jose E. Desiderio & Co., Inc. and Roman Catholic Archbishop of Manila, Inc.; 7. Transfer Certificate of Title No. RT-90688 (174553); 8. Certified True Copy of Jose E. Desiderio & Co., Inc.'s Articles of Incorporation; cDHAES 9. Certified True Copy of Jose E. Desiderio & Co., Inc.'s By-Laws; 10. Certification of Non-Registration of Company from the SEC; and 11. Sworn Certification from the Property Administration Department of the Roman Catholic Archbishop of Manila. 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: (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 administration purposes. . . ." Hence, inasmuch as the donee, Roman Catholic Bishop of Novaliches, Inc.'s , 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 because failure to comply with the said condition shall result in subjecting the donation to donor's tax. 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) cHITCS 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. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue