BIR Ruling No. 529-2017

REPUBLIC CF THF PHLIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMEN'T OF FINANCE Quezon City

YLIPPIN

R.A. No. 8525: Section 34 (H)(2) of the Tax Code of 1997. as amended; RR 10-

BIR Ruting No. 292-16 2003

T1-17-2017

ALSONS DEVELOPMENT & INVESTMENT CORPORATION 329 Bonifacio St., Davao City

Attention: Asst. General Manager-Management Services AMADO C. BERNARDINO

Gentlemen:

This refers to your letter dated March 14. 2014, received by this Office on March 24. 2014, requesting for a ruling on the additional fifty percent (50%) special deduction to be deducted from the donor's gross income under Republic Act (R.A.) No. 8525

Documents submitted disclosed that Alsons Development and Investment Corporation (TIN: is a domestic corporation duly registered with the Securities and Exchange C:ommission (SEC) under SEC Registration No that Alsons Development and Investment Corporation entered into Memorandum ot

subsidy of wages of the non-DepEd teaching plantila, to wit: continues to support the latter's "Adopt-A-School Program" by providing continuous Agreement (MOA) with the Department of Education (DepEd), whereby the former

Date Beneficiary School Year

June 26, 2013 March 28, 2011 September 20, 2011 May 10,2013 San Jose Elementary School Cabantian National High School San Jose Elementary School Cabantian National High School 2013-2016 2011-2013 2013-2014 20t1-2013

favor of Cabantian National High School' and San Jose Elementary School. as that Alsons Development and Investment Corporation executed a Deed of Donation in follows:

Date Schoot Name Period Amount October 23. 2013 December 27. 2013 Cabantian Nationat High Cabantian National High School Cabantian National High Cabantian National High Cabantian National High School School School School Daytic Baste Merly Joy D. Pamugas Jocel S. Postrano Elisa B. iLasay Loie Mae G. Emelita E. Jan to Mar 2013 2013 Jan to Mar 2013 Jan to Mar 2013 June to Dec 2013 June to Dec

Alsons Development and Investment Corperatien Page 2 of 4 1329-2017 11-17-2017

203 December 27. 2013 December 27. San Jose Elementary Schooi Cabantian Nationai High San Jose Elementary School Schoo Dalubatan Morales Alona J. Christie T. Jane Escarian Oct to Dec 2013 Total Amount 2013 June to Dec Jan to Mar 2013

and that Br. Armin A. Luistro FSC, then Secretary of the DepEd indorsed the application for tax incentive of Alsons Development and Investment Corporation relative to its donation. 50% which is equivalent to of which amounts to for a total amount of plus an additional

of 1997. as amended. donations to the Government.`its`agencies or political individual and 5% in the case of a corporation of the taxpayer's taxable net income as computed without the benefit of this deduction, viz.: subdivisions are deductible in full from the gross income of the donor. However. donations not in accordance with the National Priority Plan arc subject to limited deductibility or deductions to an amount not exceeding 10% in the case of an In reply, please be informed that under Section 34 (H) (2) (a) of the Tax Code

to finance, to provide for. or to be used in undertaking priority activities in education. health. youth and sports development, human seulements. Government of the Philippines or to any of its agencies or political subdivisions, including fully-owned government corporations. exclusively government agencies, including its regional development councils and science and culture, National Priority Plan determined by the National Economic and private philanthropic persons and institutions: political subdivisions not in accordunce with the said annual priority plan shall be subject to the limitations prescribed in paragraph (1) of this DevelopmentAuthority donation which is made to the Government or to uny of its agencies or Subsection. a Donations to the Government. and in economic development according to a (NEDA).in consultationwithappropriate Provided.That any Donations to the

2009 provides the guideline for the issuance of certification of programs. projects and activitics in the National Priority Plan (NPP), to wit: Moreover, National Econormic Development Plan (NEDA) Circular No. 01-

"D. Procedure of the Issuance of the Certification of Inclusion in the NPP

1. Certification on inclusion in the NPP may be issued for:

following item no. 2 has been complied with. received any donation; and has been mude prior to inclusion; provided that the immediutely b. PPA that is included in the NPP and to which donation a. PPA that is included in the NPPP but has not yet

donations were made so that upproved tax deductions could be claimed during the succeeding year at the time of filing of income tax returns. Office for evaluution not later than 31 December of the taxable year when 2. Request for certification shall be submitted to NEDA Central

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Page 3 of 4 Alsons Development and Investment Corporation 11-17-017

Attached to the records is a certification from NEDA certifying that the Adopt-A-School Program is considered a Priority Project in the National Priority Plan of the Government for the year 2013.

Moreso. Section 5 of Republic Act (R.A.) No. 8525, otherwise known as "An Act Establishing an 'Adopt-a-School Program' Providing Incentives Therefor, and for Other Purposes" provides --

"SEC. 5. Additional Deduction for Expenses Incurred for the Adoption. -- Provisions of existing laws to the contrary notwithstanding expenses incurred by the adopting entity for the 'Adopt-a-School Program shall be allowed an additional deduction from the gross income equivalent to fifiy percent (50%) of such expenses.

Valuation of assistance other than money shall be based on the acquisition cost of the property. . .

Furthermore, Section 3 of Revenue Regulations (RR) No. 10-2003 provides that:

SECTION 3. Tax Incentives Accruing To The Adopting Private

Agreement with a public school, shall be entitled to the following tax Entity. - A pre-qualified adopting private entity, which enters into an

incentives:

contribution/donation that were actually, directly and exclusively incurred {a Deduction from the gross income of the amount of

for the Program, subject to limitations, conditions and rules set forth in Section 34(H) of the Tax Code, plus an additional amount equivaleni to fifty percent (50%) of such contribution/donation subject to the following conditions.

That the deduction shall be availed of in the taxable year in which the expenses have been paid or incurred:

Sufficient evidence, such as 'official receipts or delivery' receipt and other {2} That the taxpayer can substantiate the deduction with

adeguate records --

(2.1) The amount deduction: expenses being claimed as

(2.2) The direct connection or relation of the expenses to

School Program. The adopting private entity shall'also provide a list of projects andior activities undertaken and the adopting private entity's participation in the Adopt-a the cost of each undertaking, indicating in particular where and how the assistance has been utilized as supported by the Agreement: and

contributed/donated property by the recipient public 2.3) Proof or acknowledgment of receipt of the

School.

endorsed by the National Secretariat, shall be filed with the Revenue 3 That the application, together with the approved Agreement

District Office (RDO) having jurisdiction over the place of husiness of the

Alsons Development and Investment Corpcration Page 4 of 4 #529-20 17 11-17-2017

donor/udopting private entity. copy furnished the RDO having jurisdiction over the properiy. if the contributionidonation is in the form of real property.

to fifty percent that thc "Adopt-A-School Program" of the Department of the Education is considered as a Priority Project included in the National Priority Plan of the Government, thus. the amount actually. directly and exclusively incurred by Alsons Development and amount of InvestmentCorporation under the Adopt-A-School In view of the foregoing. with the issuance of the certification from the NEDA is deductiblc in full from your gross income plus an amount equivalent of the said contribution/donation or .BIR Ruling No. 292-16 dated June 27, 2016) Program amounting te for a total

R.A. No. 8525, as implemented by RR No. 10-2003 and Section 101 (A) (2) of the Tax Code of 1997. as amended, respectively. Lastly. said amount is exempt from the payment of donor's tax pursuant to

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

Very truly yours.

uov A

K-1-JRC Commissioner of Internal Revenue CAESAR R. DULAY 011199