BIR Ruling [UN-252-95]

July 7, 1995 BIR RULING [UN-252-95] San Jose Fisheries School Salogon, San Jose Camarines Sur Attention: Ms . Seneca Z . Tacurda Secondary School Principal II Gentlemen : This refers to your letter dated February 21, 1995, in effect, requesting for a ruling that the donation of a pick-up truck by the United States Agency for International Development, Manila (USAID-Manila) in favor of San Jose Fisheries School is exempt from tax. cd It appears that the subject motor vehicle specifically described as follows: One (1) Unit Truck, Pick-up, gasoline engine Chassis No.: 1FTCF 10 E9 BRA 40900 Engine No.: 3E261 Model: Ford Engine Displacement: 4900cc is part of the excess property inventory of USAID; that, obviously, it was brought to the Philippines as tax-free article under and by virtue of USAID's diplomatic status as an adjunct organization of the United States Embassy; and that said vehicle is being donated, by way of assistance, to the San Jose Fisheries School. In reply, please be informed that 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 shall be exempt from the donor's tax pursuant to Section 94(a) (2) of the Tax Code, as amended. Such being the case, the donation of said pick-up truck in favor of San Jose Fisheries School, a government educational institution which is not conducted for profit, is exempt from the donor's tax. Moreover, being an adjunct of the United States Embassy, USAID is exempt from direct tax imposition, i.e., donor's tax. However, as the transferee of a tax-exempt vehicle, you are liable to 10% VAT pursuant to Section 101 (b) of the Tax Code, as amended. You are not subject to ad-valorem tax under Section 149 of the Tax Code, because the configuration of the vehicle you received by way of donation from USAID is not embraced within the class of automobiles. This serves as your authority for the registration of said vehicle with the LTO. (BIR Ruling No. 088-95, dated June 15, 1995) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)