BIR Ruling No. 451-12

July 10, 2012 BIR RULING NO. 451-12 Section 5 (c) of RA 10072 Dario Reyes Hocson & Viado Law Firm No. 902-A West Tower, Philippine Stock Exchange Centre Exchange Road, Ortigas Center Pasig City 1605 Attention: Paolo Marco R. Mapula, Esq. Associate Gentlemen : This refers to your letter dated January 21, 2011 requesting in behalf of your client, SBS REALTY AND DEVELOPMENT CORPORATION, for the exemption from payment of the donor's tax over the two (2) parcels of land donated to the PHILIPPINE NATIONAL RED CROSS located at the Municipality of Tayabas, Quezon. It is represented that SBS REALTY AND DEVELOPMENT CORPORATION, a corporation duly organized and existing under the laws of the Republic of the Philippines with Tax Identification Number (TIN) 004-853-365 and with business address at No. 2959 Taft Avenue, San Rafael, Pasay City, is engaged in the business of real estate buying, developing, subdividing and selling; and that the PHILIPPINE NATIONAL RED CROSS is a national voluntary organization auxiliary to the government, incorporated under Republic Act No. 95, as amended by Republic Acts 855 and 6373, and Presidential Decree 6373, and Presidential Decree No. 1264 and further amended by Presidential Decree No. 1643, with TIN 000-804-271 and registered address at PRC Building, Bonifacio Drive, Port Area, Manila. It is further represented that SBS REALTY AND DEVELOPMENT CORPORATION is the owner of two (2) parcels of land containing an area of one hundred and eight thousand three hundred and sixty three (108,363) square meters, more or less, situated in Barrio of Ibabang Palele, Municipality of Tayabas, Province of Quezon, covered by Transfer Certificates of Titles (TCT) No. T-354061 and T-354062, issued by the Office of the Registrar of Deeds of the Province of Quezon; and that a Deed of Donation dated December 8, 2009 was executed wherein SBS REALTY AND DEVELOPMENT CORPORATION, represented by its Chairman of the Board, Teresita K. San Buenaventura, voluntarily and freely gives, transfers, cedes and conveys, by way of donation, unto PHILIPPINE NATIONAL RED CROSS, its assigns and successors-in-interest, all of its rights, title and interest in the aforementioned parcels of land; and that PHILIPPINE NATIONAL RED CROSS, represented by its Chairman and Chief Executive Officer, Richard J. Gordon, agrees to accept the said donation. aCHcIE Based on the foregoing, you now request that the donation made by SBS REALTY AND DEVELOPMENT CORPORATION to PHILIPPINE NATIONAL RED CROSS is exempted from the payment of donor's tax. In support of your request, you have submitted the following documents: 1) Letter request for tax exemption; 2) Original copy of the Deed of Donation dated December 8, 2009; 3) Certified true copy of the BIR Certificate of Registration of SBS REALTY AND DEVELOPMENT CORPORATION; 4) Certified true copies of the PHILIPPINE NATIONAL RED CROSS: a) By-laws; b) BIR Certificate of Registration; c) Audited Financial Statements for the immediately preceding taxable year and the corresponding Annual Income Tax Return. 5) Certified true copies of Transfer Certificates of Titles (TCT) No. T-354061 and T-354062; 6) Certified true copies of latest Tax Declarations; 7) Verification and Certification of Non-forum Shopping; and 8) Special Power of Attorney. In reply, please be informed that the donation of parcels of land covered by Transfer Certificates of Titles (TCT) No. T-354061 and T-354062 pursuant to Deed of Donation dated December 8, 2009 made by SBS REALTY AND DEVELOPMENT CORPORATION to the PHILIPPINE NATIONAL RED CROSS shall be exempted from donor's tax. TcSICH Pursuant to Section 5 (c) of Republic Act No. 10072 (RA 10072), otherwise known as Philippine Red Cross Act of 2009, all donations, legacies and gifts made to the PHILIPPINE NATIONAL RED CROSS to support its purposes and objectives shall be exempt from the donor's tax and shall be deductible from the gross income of the donor for income tax purposes, to wit: "Section 5. Privileges. xxx xxx xxx (c) Be exempt from payment of all direct and indirect taxes, all provisions of law to the contrary notwithstanding, including value-added tax (VAT), fees and other charges of all kinds on all income from its operations, including the use, lease or sale of its real property, and provision of services. The Philippine Red Cross shall also be exempt from direct and indirect taxes, including VAT, duties, fees and other charges on importations and purchases for its exclusive use. Likewise, all donations, legacies and gifts made to the Philippine Red Cross to support its purposes and objectives shall be exempt from the donor's tax and shall be deductible from the gross income of the donor for income tax purposes or from the computation of the donor-decedent's net estate as a transfer for public use for estate tax purposes. Finally, the Philippine Red Cross shall be exempt from the payment of real property taxes on all real properties owned by it." (Underscoring supplied) In as much as PHILIPPINE NATIONAL RED CROSS is a non-government organization under its Charter, donations made to it to support its purposes and objectives are exempt from the payment of donor's tax pursuant to Section 5 (c) of RA 10072. 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. aAHDIc Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue