BIR Ruling [UN-165-94]

May 30, 1994 BIR RULING [UN-165-94] Dienzo Estate & Livelihood Association, Inc. Brgy. San Isidro, Rodriguez (Montalban) Rizal, Philippines Attention: Ms . Aurora Jurado Vda . de Dienzo Chairperson M a d a m : This refers to your letter dated February 14, 1994 requesting exemption under Section 94 (a) (3) of the Tax Code, as amended, of the donations made by you of two (2) parcels of land located in Montalban, Rizal containing an area of 210,000 square meters (or equivalent to 21 hectares) and 50,000 square meters, more or less, covered by Tax Declaration No. B-099-00175 in favor of the Christ Charismatic Fellowship, Inc. by virtue of two (2) Deeds of Donations executed on May 17, 1994. Documents submitted show that the Christ Charismatic Fellowship, Inc. is a religious corporation duly organized for religious purposes and for administration of its temporalities. In reply, please be informed that inasmuch as the donee is a religious institution, the aforementioned donations are exempt from the payment of donor's tax pursuant to Section 94 (a) (3) of the Tax Code, as amended, subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. It should be understood that the above property shall be used for religious purposes, and that any subsequent transfer of the property or any part thereof to other persons, individual or corporate, for consideration in the ordinary course of business shall be subject to the value added tax. Moreover, the income derived from any activity conducted for profit using the said donated parcels of land shall be subject to income tax under Section 24 of the Tax Code, regardless of the disposition made of such income. Moreover, the aforesaid Deeds of Donation are 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 P10.00 imposed under Section 188 of the same Code (BIR Ruling No. 94 (a) (3) 301-92). cdtech Very truly yours, ALICIA P. CLEMENO Acting Asst. Commissioner (Legal Service)