BIR Ruling No. 669-2017

BUREAU OFONTERNAL REVENUE REPUBIIG: OF THF PHILIPPINFS DEPARTMENT OF FINANCE

RA No. 8525

Ortigas Center FGP Corporation 3/F Benpres Building Exchange Road corner Meralco Avenue Section 34(H)(2), Tax Code of 1997 BIR Ruling No. 292-2016 n 669-2017 12-20-2017

Attention: Maria Carmina Z. Ubana VP and Comptroller

Gentlemen:

Corp. for the availment of the exemption from donor's tax and deductibility of the "Adopt-A-School Act of 1998." donation in the amount of (DepEd), in accordance with Republic Act (RA) No. 8525, otherwise known as the This refers to your letter dated September 9, 2015, requesting on behaif of FGP made in favor of the Department of Education

training, provision of education supplies, infrastructure support as well as support for school extra-curricular activities to ensure school participation of students: that Commission (SEC) under SEC Registration No. First Gas Power Corp. and FGP Corp. entered into a Memorandum of Agreement (MOA) with the DepEd whereby the former proposed to DepEd the provision of health Security, Ramon J. Araneta, executed on November 7, 2014 a Deed of Donation in favor of DepEd for and in behalf of Sta. Rita Karsada Elementary School, Sta. Rita City. whereby the former donated to the latter the FGP Education Program amounting to and wellness programs like milk feeding and preventive dental health care, teacher pursuant to said MOA, FGP Corp., through its Vice President for External Affairs and Aplaya Elementary School and Sta. Clara Elementary School, all located in Batangas Based on the documents submitted, it is shown that FGP Corp. (TIN: is a domestic corporation duly registered with the Securities and Exchange : that Br. Armin A. Luistro FSC, Secretary of the DepEd, indorsed the that on March 17, 2014.

February 3, 2014 issued by the NEDA, the Adopt-A-School Program is considered a application for tax incentives of FGP Corp. relative to the above-donation, 100% of which amounts to Priority Project in the National Priority Plan of the Government for the year 2014. for a total amount of plus an additional 50% thereof amounting to and that per Certification dated

deductibility or deductions to an amount not exceeding 10% in the case of an individual 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 In reply, please be informed that under Section 34 (H) (2) (a) of the Tax Code

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and 5% in the case of a corporation of the taxpayer's taxable net income as computed without the benefit of this deduction.

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

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

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

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

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

contribution/donation that were actually. directly and exclusively incurred percent (50%) of such contribution/donation subject to the following for the Program, subject to limitations, conditions and rules set forth in Section 34(H) of the Tax Code, plus an additional amount equivalent to fifty conditions: a} Deduction from the gross income of the amount of

(1) That the deduction shall be availed of in the taxable year in which the expenses have been paid or incurred;

(2) That the taxpayer can substantiate the deduction with sufficient evidence, such as official receipts or delivery receipt and other adequate records --

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

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

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

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

contribution/donation is in the form of real property.

(b) Exemption of the Assistance made by the donor from payment of donor's tax pursuant to Sections 101 (A)(2) and (B)(1) of the Tax Code of 1997.

Accordingly, since FGP Corp. is compliant with the requirements set forth

gross income, plus an additional deduction equivalent to fifty percent (50%) thereof in under Section 3 ofRR 10-2003, the amount it actuallv directly and exclusively incurred No. 292-2016 dated June 27. 2016) for the FGP Education Program amounting to the amount of , or a total deductible amount of - :, is fully deductible from its (BIR Ruling

exempt from the payment of donor's tax pursuant to R.A. No. 8525, as implemented by RR No. 10-2003, and Section 101 (A) (2) of the Tax Code of 1997, as amended. (BIR Ruling No. 292-2016 dated June 27, 2016) Lastly, the FGP Corp. Education Program amounting to is likewise

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

ruling shall be considered null and void.

Very truly yours.

MeamAy

Commissioner of Internal Revenue CAESAR R. DULAY 011950 K-