BIR Ruling No. 310-2016

REPUBLICGF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAUOFINTERNALREVENUE

Quezon City

RA 7279:RR 11-97.as amended by RR 17-

01: RMO 41-91 Sections 32 (B) (7) (b) &

196.of the Tax Code of 1997.as amended BIR Ruling No.046-16

#310-2016 6-28-2016

HON.MARLO S.GUILLERMO

Office of the Municipal Mayor Municipality of Diffun Province of Quirino

Si:

This refers to your letter dated January 2,2012 requesting for tax exemption

from donor's tax on its donation over the parcels of land to different beneficiaries of

Aurora Resettlement Project.

Documents submitted disclose that the Municipality of Diffun is the registered

owner of a parcels of land situated at Brgy. Aurora West. Municipality of Diffun.

Quirino Province: that the Municipal Government passed Resolution Nos. 05 and

06.s-1998:that on 8 October 1998,the Municipality of Diffun entered into a

Memorandum of Agreement with the National Housing Authority (NHA whereby

the former sought financial and technical assistance from latter for the socialized

housing/resettlement project of the Municipality of Diffun intended to provide

housing assistance for urban poor families requiring relocation/resettlement: that on

19 November 2012,the Municipality of Diffun, as represented by the Municipal

Mayor.Marlo S.Guillermo.executed three (3 Deeds of Donation over Two Hundred

Forty Two (242 titled lots to the beneficiaries of the resettlement project.

In reply, please be informed that the distribution or transfer of the lots to the

beneficiaries of resettlement/socialized housing project to benefit poor families

qualified for relocation and resettlement in the Municipality of Diffun is exempt from

Income Taxes/ Donor's Tax. The Municipality of Diffun, which is tasked to

implement the distribution of the housing units,shall not be subject to any tax,for it is

only performing a mandated governmental function of providing housing assistance to

urban poor families requiring relocation/resettlement. (BIR Ruling No.046-16 dated

January 28.2016)

042395

Resolution declaring the municipal lots situated in Aurora West Diffun Quirino as site for the

Resettlement Project of the Municipality of Diffun Quirino Authorizing the Hon Delfin V.VaquilarJr.Mayor of the Municipality of DiffunQuirino,to enter

into a Memorandum of Agreement with the National Housing Authority regarding the implementation

of the Resettlement Project of the Municipality see Annex for the masterlist of qualified beneficiaries (with remarks/explanation on the discrepancies in the masterlist of beneficiaries and Deed of Donation consisting of fourteen (14 pages

#310-20 16 6-28-2016

Municipality of Diffun

Page 2of 2

An instrumentality of the government which acts for the purpose of

accomplishing government policies and objectives and extending cssential services to

the people performs governmental and not proprietary functions. (Peoples Homesite

and Housing Corporation vs.Court of Industrial Relations.150 SCRA 296. 310

1987 Thus.in line with the foregoing and since it is a declared State policy as laid

down in Republic Act No.7279, otherwise known as the Urban Development and

Housing Act of 1992 to provide decent and affordable housing to the

underprivileged and homeless citizens, the Municipality of Diffun, therefore, shall not

be subject to any tax in its resettlement project providing housing assistance to urban

poor families requiring relocation/resettlement in the Municipality of Diffun, as they

are only performing mandated governmental function.

However, the notarial acknowledgment to the individual deed of conveyance

is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax

Code of 1997, as amended.

This ruling is being issued on the basis of the foregoing facts as represented.

However,if upon investigation, it will be disclosed that the facts are different, then

this ruling shall be considered null and void.

Very truly yours.

KIM S.JACINTO-HENARES

K-1-JRC Commissioner of internal Revenue 042395

JUN 2 7 2016