BIR Ruling No. 328-2016

BEREAUOLINTERNALREVEN RLPUBLICOFNHEHHIUPPINIS DIPARTMENTOFHNANCE

Quezon City

Section 101A2101B1.Tax

Code of 1997.as amended Revenue Regulations No.25-03 BIR Ruling No.096-2014: BIR Ruling No.165-2012

#328-2016

6-29-2016

DEPARTMENT OFTRADE AND INDUSTRY 7th Floor New Solid Bldg..357 Sen.Gil Puyat Ave.Makati City.Philippines Date

AttentionMS.ASTERIA C.CABERTE

Gentlemen: Regional Director

This refers to your letter dated March 25, 2014 requesting a confirmation of your

opinion that the donation made by the Deutsche Gessellschaft fur Internationale

Zusammenarbeit (GIZ Manila Office to the Department of Trade and Industry (DTl last

December 2012 is exempt from Donor's Tax.

GIZ.a Germany-based international enterprise owned by the German Federal

Government and the DTI are partners in the technical cooperation program Private Sector

Promotion-Small and Medium Enterprise Development for Sustainable Employment

Program(PSP-SMEDSEP).During the course of program.GIZ purchased locally a Toyota

Innova Manual Transmission more specifically described as follows

Chassis No. Type of BodyWagon Year Model 2006 Plate No. Engine No. Color: Gray

Part of the administrative procedures of Gl/provides that all serviceable cquipment

and materials procured under the technical assistance programs/projects. including the

above-mentioned motor vehicle. shall be turned over to the partner at the end of each

program.At the end of the PSP-SMEDSEP on December 2012.GIZ turned over.by

donation, to the DTI the above-deseribed vehicle

However.one of the reguirements of the Department of Foreign Affairs (DFA) is

the payment of taxes and duties due to the motor vehicle upon effecting the donation.The

said motor vehicle was purchased by GIZ locally.free of tax as approved by the BIR.As

per guidelines of GIZ. the donor. the DTI as the donee shall shoulder the corresponding

cost of donor's tax.

042336

Donation of Deusche Gessellschaft fur Internationate Lusanmenarbeit to DTI of One Tovota Innova Vehicle Page 2 of 3 328-2016 -29-2016

any of its agencies which are not conducted for profit, or to any of its political subdivisions. are exempt from the payment of the donor's tax pursuant to the provisions of Section provides: 101A(2and Section 101B1of the Tax Code of 1997,as amendedTax Code),which In reply, please be informed that donations made in favor of the Government and

or donations shall be exempt from the tax provided for in this Chapter: SEC.101.Exemption of Certain Gifts.The following gifts

AIn the Case of Gifis Made by a Resident. XXX XX XXX

profit. or to any political subdivision of the said Government 2Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for

XXX XXX XXX

B) In the Case of Gifis Made by a Nonresident not a Citizen of the Philippines.

entity created by any of its agencies which is not conducted for lGifts made to or for the use of the National Government or any profit.or to any political subdivision of the said Government.

quoted provisions.(BIR Ruling No.165-2012 dated March 9.2012) made by GIZ in its favor is exempt from the payment of donor's tax pursuant to the above Accordingly.since DTI is a department of the National Government. the donation

7.2006 to Embassy of the Federal Republic of Germany granting exemption from value- for the official use of the Small and Medium Enterprise Development for Sustainable Employment Program under the project of GDC-GTZi added taxVATon the local purchase of two2 units Toyota Innova F Diesel2.5L M/T. This Office has previously issued BIR ITAD Ruling No.137-06 dated November

Details of said vehicles locally purchased are as follows:

Frame No.. Model year. Color: Engine No. Make: two (2 units Toyota Innova 2.5E Diesel MT 2006 Ouick Silver

042336

per Note No.275/10 dated December 1,2010 of the Embassy of the Federal Republic of Germany and DFA Note 11-0197 dated January312011ITAD BIR Ruling No.388-12 dated December6.2012 GZ as the new name of Gessellschaft fur Technische Zusammenarbeit GT7effective lanuary t201

Zusanmenarbeit to DTI of One Tovota Innova Vehicle Donation of Deutsche Gessellschaft fur Internationate Page 3 of 3 328-20:6 6-29-2016

subject of this donation and which was exempted from VAT on its purchase under the aforementioned Ruling. From the foregoing. it is shown that one of the two vehicles purchased is the vehicle

excise tax due on the transaction pursuant to Section 107(B of the Tax Code and Section 8 of Revenue Regulations No.25-03.respectively.BIR Ruling No.096-2014 dated March valorem taxexcise tax.DTI,not being exempt from the same.shall pay the VAT and the 14.2014 Noting that the purchase of the vehicle was previously exempted from VAT and ad

to documentary stamp tax of P15.00 imposed under Section 188 of the same Code. (BIR under Section 196 of the Tax Code. However, the acknowledgment on said deed is subject Ruling No. 024-10 dated August 4,2010) Moreover. the Deed of Donation is not subject to documentary stamp tax imposed

However, if upon investigation it will be disclosed that the facts are different. then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented.

Very truly yours.

KIM S.JACINTO-HENARES Commissioner of Internal Revenue

04233E

JUN 2 2016

K I-nra