BIR Ruling No. 603-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENTOF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

RA No.8525;Section 34(H)2),

of 1997, as amended BIR Ruling No. 292-2016 National Internal Revenue Code

DT-0603.-2020 OCT 2 0 2020

FGP CORPORATION 3F Benpres Bldg., Exchange Road cor. Meralco Avenue, Pasig City 1600

Attention: MARIA CARMINA Z.UBANA

Vice-President and Comptroller

Gentlemen:

(R.A.) No. 8525, otherwise known as the Adopt-A-School Act of 1998.3 for the availment of the exemption from donor's tax and deductibility of the donation of This refers to your letter dated February 26, 2016, requesting on behalf FGP CORP. to the Department of Education (DepEd), in accordance with Republic Act

application for tax incentives of FGP CORP. relative to the above-donation, 100% of which ExchangeCommission(SEC)underSECRegistration No. July 31,2015,FGP Corp. entered into Memorandum of Agreement (MOA) with the December 17, 2015, a Deed of Donation in favor of DepEd whereby the former donated to the latter a total amount of Luistro FSC, Secretary of the DepEd, Chairperson, Coordinating Council, indorsed the total amount of the National Economic and Development Authority (NEDA), the Adopt-A-School Program is considered a Priority Project in the National Priority Plan of the Government for the year 2015. DepEd, in which the former proposed to DepEd to construct thirteen (13) classrooms with accessories, for the benefit of school children affected by Yolanda; that pursuant to said MOA, FGP CORP., through its President and COO Francis Giles B. Puno, executed on amounts to It Is represented that FGP Corp., with Tax Identification Number (TIN) is a domestic corporation duly registered with the Securities and plus an additional 50% thereof amounting to and that per Certification dated January 27, 2015 issued by for School Rebuilding Project; that Br.Armin A. that on for a

Revenue Code of 1997, as amended, donations to the Government, its agencies or political subdivisions are deductible in full from the gross income of the donor. However, donations not in accordance with the National Priority Plan are subject to limited deductibility or deductions In reply, please be informed that under Section 34 (H) (2) (a) of the.National Internal

to an amount not exceeding 10% in the case of an individual and 5% in the case of a corporation of the taxpayer's taxable net income as computed without the benefit of this deduction.

gross income of the adopting entity equivalent to fifty percent (50%) of the expenses incurred for the project, to wit: Moreover, Section 5 of RA No. 8525 provides for an additional deduction from the

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

FGP CORPORATION DT-0603-2020 dCT -2 0 2020

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

The above provision is implemented by Revenue Regulations (RR) No. 10-2003 which provides for the guidelines in the availment of the additional deduction for the expenses incurred by the adopting entity:

"SECTION 3. Tax Incentives Accruing to the Adopting Private Entity. -- A pre- qualified adopting private entity, which enters into an Agreement with a public school, shall be entitled to the following tax incentives:

(a)Deductionfromthe: gross income of the amount of

the Program, subject to limitations, conditions and rules set forth in Section contribution/donation that were actually, directly and exclusively incurred for

(50%) of such contribution/donation subject to the following conditions: 34(H) of the Tax Code, plus an additional amount equivalent to fifty percent

(l) 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 adequate records -- (2) That the taxpayer can substantiate the deduction with

(2.1) The amount of expenses being claimed as deduction;

(2.2) The direct connection or relation of the expenses to undertaken and the cost of each undertaking, indicating in particular where and how the assistance has been a-School Program. The adopting private entity shall also provide a list of projects and/or activities utilized as supported by the Agreement; and the adopting private entity's participation in the Adopt-

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

contribution/donation is in the form of rgal property. ' the RDO having jurisdiction' over the property, if the of business of the donor/adopting private entity, copy furnished Revenue District Office (RDO) having jurisdiction over the place endorsed by the National Secretariat, shall be filed with the 3) That the application, together with the approved Agreement

In view of the foregoing, since FGP CORP. is compliant with the requirements set forth

deduction equivalent to fiftv percent (50%) thereof in the amount of the construction of thirteen (13) classrooms with accessories of the Department of Education amounting to under Section 3 of RR 10-2003, the amount it actually, directly, and exclusively incurred for is fully deductible from its gross income, plus an additional or a total

deductible amount of (BIR Ruling No.292-2016 dated June 27,2016)

Lastly, Section 101(A)(1)' of the National Internal Revenue Code of 1997, as amended. provides that:

1 Renumbered by Republic Act No. 10963 or the TRAIN LAW.

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0603-Z020

FGP CORPORATION OCT 2 0 2020

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

(A). In the Case of Gifts Made by a Resident.

Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said (1) Gifts made to or for the use of the National

Government.

June 27, 2016) DepEd is also exempt from the payment of donor's tax. (BIR Ruling No. 292-2016 dated Thus, pursuant to the above quoted provision, the donation made by FGP CORP. to

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. However.

Very truly yours.

eeesamuea

Commissioner of Internal Revenue CAESAR R.DULAY

036954

K-1-JAC

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