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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Every corporation incorporated under the Revised Corporation Code has the power and capacity, among others, to receive real and personal property, subject to the limitations prescribed by law and the constitution. (Section 35, par. g, R.A. No. 11232)
Under the 1987 Constitution, private corporations or associations may not hold such alienable lands of public domain except by lease, for a period not exceeding twenty-five years, renewable for more than twenty-five years, and not to exceed one thousand hectares in area. (Section 3, Article XII, 1987 Constitution)
No private lands shall be transferred and conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of public domain. (Section 7, Article XII, 1987 Constitution)
A donation is defined as “an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it.” (Article 725, Civil Code)
On the part of the donor, it is an exercise of one’s generosity. (Spouses Romulo v. Court of Appeals, G.R. No. 105944, February 9, 1996)
Jurisprudence states that:
“Donation is an expression of our social conscience, an act rooted purely on the goodness of one’s heart and intent to contribute.” [The Missionary Sisters of Our Lady of Fatima (Peach Sisters of Laguna), represented by Rev. Mother Concepcion Realon, et al. v. Amando Alzona, et al., G.R. 224307, August 06, 2018]
Under the Civil Code of the Philippines, the donation of an immovable property must be made in a public document. The acceptance of the donation may be made in the same document or in a separate instrument. (Article 749, Civil Code)
Under the Revised Corporation Code of the Philippines, among the powers and capacities of a corporation is its capacity to receive real and personal property. (Section 35, par. g, R.A. No. 11232)
The law says:
“Every corporation incorporated under this Code has the power and capacity:
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(g) To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage, and otherwise deal with such real and personal property, including securities and bonds of other corporations, as the transaction of the lawful business of the corporation may reasonably and necessarily require, subject to the limitations prescribed by law and the constitution;
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In the case of [The Missionary Sisters of Our Lady of Fatima (Peach Sisters of Laguna), represented by Rev. Mother Concepcion Realon, et al. v. Amando Alzona, et al., G.R. 224307, August 06, 2018], the Supreme Court upheld the validity of a donation made by an individual to a charitable corporation and ruled that the Deed of Donation is binding to the donor’s successors and heirs.
Did you know that donations by a resident in favor of educational and/or charitable, religious, cultural or social welfare corporations are exempt from donor’s tax?
BIR Revenue Regulation No. 12-2018 provides that:
Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited non-government organization, trust or philanthropic organization or research institution or organization: Provided, however, not more than 30% of said gifts will be used by such donee for administration purposes. For the purpose of this exemption, a ‘non-profit educational and/or charitable corporation, institution, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization’ is a school, college or university and/or charitable corporation, accredited nongovernment organization, trust or philanthropic organization and/ or research institution or organization, incorporated as a nonstock entity, paying no dividends, governed by trustees who receive no compensation, and devoting all its income, whether students’ fees or gifts, donation, subsidies or other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation.” (Sec. 17 of RR No. 12-2018)
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In case of donations made by a non-resident or non-citizen of the Philippines, the National Internal Revenue Code provides that:
Gifts 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 percent (30%) of said gifts shall be used by such donee for administration purposes. (Sec. 101 (B) of NIRC, as amended)
Related Article/s:
Requisites of a Valid Donation
What are the instances when a donation may be reduced?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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