BIR Ruling [UN-267-95]

July 24, 1995 BIR RULING [UN-267-95] Bicol National Park Foundation, Inc. St. Ignatius Child Center J. Pimentel St., Daet, Camarines Norte Attention: Bishop Benjamin J . Almoneda, D . D . Chairman Gentleman : This refers to your letter dated June 10, 1994, in effect, requesting for a ruling that the donation of three (3) motor vehicles by the United States Agency for International Development, Manila (USAID-MANILA) in favor of Bicol National Park Foundation, Inc. is exempt from tax. Records disclosed that the subject motor vehicles which are specifically described as follows: One (1) unit Truck, with chassis no.: 2GCGG31J4J41407370 model: Chevrolet Van Engine no.: 14022660 One (1) unit Truck, with chassis no.: 1GCGK26M20M124036 model: Chevrolet Suburban Engine no.: V0917D3N and One (1) unit Truck, with chassis no.: 2GCGG31J2J414358 model: Chevrolet Van Engine no.: 23500376 are part of the excess property inventory of USAID and that, obviously, they were brought to the Philippines as tax-free articles under and by virtue of USAID's diplomatic status as an adjunct organization of the United States Embassy; and that said vehicles are being donated, by way of assistance, to the Bicol National Park Foundation, Inc. In reply, please be informed that gifts made in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, trust or philanthropic organization or research institution or organization: Provided, however, that not more than thirty per centum of said gifts shall be used by such donee for administration purposes, shall be exempt from the donor's tax pursuant to Section 94(a)(3) of the Tax Code, as amended. Such being the case, the aforementioned donation of three (3) motor vehicles in favor of the Bicol National Park Foundation, Inc., a non-stock, non-profit cultural organization, 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 the 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 Re-registration of said vehicles with the LTO. (BIR Ruling No. 088-95, dated June 15, 1995) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)