BIR Ruling No. 529-12

August 23, 2012 BIR RULING NO. 529-12 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 Mary's Foundation, Inc. 483-C Remedios Compound Archbishop Reyes Ave., Cebu City Attention: Sr. Ma. Elizabeth Laurente, LGC Gentlemen : This is to acknowledge receipt of your letter dated November 30, 2010 received via endorsement from Revenue Region No. XIII, Cebu City dated May 13, 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. ADHCSE It is represented that Sr. Ma. Elizabeth Laurente, LGC (donor) is the owner of a parcel of land located in Mantalongon, Barili, Cebu described as Lot 4249, Cadastral Survey of Barili covered by Transfer Certificate of Title (TCT) No. CT-1630, containing an area of five thousand two hundred eighty eight (5,288 sq.m.) square meters and that for motives of giving glory to God and praise to him and as a consequence of the donor being a religious sister with the vow of poverty, a deed of donation was executed on July 1, 2010 donating the above-described property to Mary's Foundation, Inc. , (donee) a religious organization registered with the Securities and Exchange Commission (SEC) under SEC Registration Certificate No. 50638. 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) Inasmuch as Mary's Foundation, Inc. is a religious corporation, 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. EHIcaT Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue