BIR Ruling No. 478-12

July 30, 2012 BIR RULING NO. 478-12 Section 101 (A) (2), 1997 NIRC; BIR Ruling No. 478-2011 National Tobacco Administration Sct. Reyes St. corner Panay Avenue Quezon City Attention: Mr. Faustino O. Taal OIC, Manager Gentlemen : This refers to your letter dated September 15, 2009 which was indorsed by the Regional Director of Revenue Region No. 1, Calasiao Pangasinan, requesting for a legal opinion on the taxability of the donation of a vacant lot by the Provincial Government of Ilocos Sur to the National Tobacco Administration (NTA) pursuant to Section 101 of the 1997 Tax Code, as amended. DEHaTC Documents submitted show that the Provincial Government of Ilocos Sur is the owner of a property containing an area of 540 sq.m., more or less, situated between the Department of Education (DepEd) and ABC Buildings along Quirino Boulevard, Vigan City. On the other hand, NTA is a government corporation created under Executive Order No. 245 and is mandated by law to promote the development of the tobacco industry. NTA is in need of a parcel of land for the construction of its intended NTA Vigan Branch Office in the 1st District of the Province of Ilocos Sur. Pursuant to SP Resolution No. 091, Series of 2009 the Sangguniang Panlalawigan of Ilocos Sur approved the transfer and conveyance of the subject vacant lot by way of a Deed of Donation unto NTA and was duly approved by the aforesaid body on July 28, 2009. In reply thereto, please be informed that since the donee, NTA, is a government agency, the donation is exempt from the payment of donor's tax pursuant to Sec. 101 of the Tax Code of 1997, as amended, which provides as follows: "Section 101. Exemption of Certain Gifts . ... (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." Moreover, the aforesaid Deed of Donation is not subject to the documentary stamp tax under Sec. 196 of the 1997 Tax Code, as amended, but only to the documentary stamp tax of P15.00 on certification under Section 188 of the same Code. (BIR Ruling No. 478-2011 dated December 5, 2011) 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 as null and void. cISDHE Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue