BIR Ruling No. 471-11

December 5, 2011 BIR RULING NO. 471-11 Section 101 (A) (3), NIRC of 1997; BIR Ruling No. 225-2011; BIR Ruling No. 241-2011 Roman Catholic Bishop of Malolos, Inc. Chancery Office, Diocese of Malolos Malolos City, Bulacan Attention: Most Rev. Jose F. Oliveros, D.D. Bishop of Malolos Gentlemen : This refers to your letter dated June 23, 2010 requesting for exemption from the payment of donor's tax relative to the donation in favor of the ROMAN CATHOLIC BISHOP OF MALOLOS, INC. Documents submitted disclosed that the ROMAN CATHOLIC BISHOP OF MALOLOS, INC. (RCBMI), with Taxpayer Identification No. 002-285-379, is a non-stock, non-profit religious organization registered with the Securities and Exchange Commission under SEC Reg. No. 20674 dated April 30, 1962; that the purpose for which this religious corporation was incorporated is for the administration of its affairs, properties and temporalities; that its funds primarily come from "faith promises", tithes and donations; that a Deed of Donation was executed by Isabel W. Icasiano, Milagros I. Dolores, Andres I. Dolores and Jose I. Dolores, as donors, of the following properties in favor of RCBMI as donee: 1) A parcel of land consisting of 1,002 square meters with improvements located in Hagonoy, Bulacan covered by Transfer Certificate of Title No. RT-75408 (T-18301) of the Registry of Deeds of Bulacan; and 2) A five feet image of the Virgin of the Poor/ Birhen ng Dukha , Our lady of Banneux, Belgium from Milagros I. Dolores; and that the said properties are being donated exclusively for religious purposes and for the benefit of the National Shrine and Parish of St. Anne, Poblacion, Hagonoy, Bulacan. CADacT 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 administrative purposes. . . ." Hence, in as much as the donee, RCBMI, 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. (BIR Ruling No. 225-2011 dated July 13, 2011; BIR Ruling No. 241-2011 dated July 22, 2011) Moreover, the Deed of Donation is 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) However, there appears to be an inconsistency as to the land areas owned by donors Isabel W. Icasiano and Virginia Icasiano Dolores per TCT and the Deed of Donation. It therefore is necessary for the BIR to verify and establish the following matters before issuance of any Certificate Authorizing Registration (CAR) is issued for the donated property: 1) Whether or not the Estate of Virginia Icasiano included her proportionate share in the subject property; EDCTIa 2) Whether or not the estate tax has been settled; 3) Since there are other co-owners of the subject property that are not parties to the Deed of Donation, whether or not those other co-owners had already transferred their respective share of the property in favor of the donors, Isabel W. Icasiano and Virginia Icasiano Dolores. If in the negative, then, only those shares of Isabel W. Icasiano and Virginia Icasiano Dolores should be the proper subject of the donation; and 4) Whether or not further conveyances or transfers among the co-owners have been subjected to tax and were accordingly issued tax clearances. The Revenue District Office having jurisdiction over the domicile of the donors is therefore directed to make the verifications accordingly. 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