RR No. 13-2025 — Consolidated provisions to simplify and streamline the procedures and requirements relative to the availment of the tax exemptions and incentives granted to the participating private entities under RA No. 8525 (Adopt-a-School Act of 1998), RA No. 12063 (Enterprise-Based Education and Training (EBET) Framework Act), and the Tax Code (Date Posted: April 2, 2025)

BUREAU OF INTERNALREVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Bringing In Revenues for Nation-Building PILIPINAS FFB 2 0_2025 BAGONG

REVENUE REGULATIONS NO.01 3 - 2 0-2 5

SUBJECT:Consolidated Provisions to Simplify and Streamline the Procedures

and Requirements Relative to the Availment of the Tax Exemptions and Incentives Granted to the Participating Private Entities Under Republic Act No. 8525 or the "Adopt-a-School Act of 1998" Republic Act No. 12063 or the "Enterprise-Based Education and Training (EBET) Framework Act, and the Tax Code.

TO: All Internal Revenue Officials, Employees and Others Concerned

SECTION 1. Scope. -- It is the policy of the. State to institute various programs that encourage private entities to help or assist in upgrading and modernizing educational institutions in the Philippines.

of 1997, as amended (Tax Code), the following Regulations are hereby promulgated to consolidate provisions of Revenue Regulations (RR) No. 10-2003 and Section 294 (C) Therefore, pursuant to Sections 244 and 245 of the National Internal Revenue Code

of RA No. 12063 and the Tax Code. (2) and (4) of the Tax Code, in order to ensure the efficient and effective implementation of the tax incentives granted under Sections 5 and 6 of RA No. 8525, Sections 19 and 20

Section 294 (C)(2) and (C)(4) of the Tax Code. --Registered export and domestic market enterprises are allowed to deduct: SECTION 2. Incentives to registered export and domestic enterprises under

a. Fifty percent (50%) additional deduction on the labor expense incurred in the taxable year. The said additional deduction on the labor expense shall not

ADMIN UNITME: :O T MAR 3 1 2025 R e managerial, administrative, indirect labor, and support services; and include salaries, wages, benefits, and other personnel costs incurred for One hundred percent (100%) additional deduction on training expense incurred

ANTERMENTREN in the taxable year. The additional training expense shall only apply to trainings. as approved by the Strategic Investment Priority Plan, given to the Filipino employees engaged directly in the registered business enterprise's production of goods and services.

that the Applicant has the requisite qualifications to avail of the incentives. Applicant or its authorized officer as to the amount of the expenses being deducted and Sun availing of the above incentive, the Applicant shall attach to its ITR the B$cation from the DepED or CHED or TESDA and a Sworn Declaration issued by

BIR National Office Bldg., Senator Miriam Defensor-Santiago Avenue, Diliman, Quezon City : Trunkline: 8981-7000 ; 8929-7676] Website: www.bir.gov.ph

The Applicant shall keep the official invoices and other supporting documents to support the expenses for purposes of BIR post-audit.

SECTION 3. Incentives granted to private entities under RA No. 8525, as implemented by RR No. 10-2003 (Adopt-a-School Program). -

A Incentives granted to adopting private entities. -- A private entity, which enters into an agreement2 with a public school to provide assistance3

(Adopting Private Entity) shall be entitled to the following tax exemptions and incentives:

i. Deduction from the gross income of the amount of contribution/donation

that were actually, directly and exclusively incurred for the program. subiect to limitations, conditions and rules set forth in Section 34(H) of the Tax Code,4 plus an additional amount equivalent 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 incurted:

2 That the taxpayer can substantiate the deduction with sufficient evidence, such as official invoice and other adequate records:

The amount of expenses being claimed as deduction;

BUREAU OF INTERNAL REVENU CORDS MANAGEMENT DIVISIaN e D The direct connection or relation of the expenses to the of projects and/or activities undertaken and the cost of each Adopting Private Entity's participation in the Adopt-a-School Program. The Adopting Private Entity shall also provide a list

MAR 31-2025 undertaking, indicating in particular where and how the and assistance has been utilized as supported by the agreement;

ADMIN UNIT O 3 Proof oracknowledgmentofreceiptof the

contributed/donated property by the recipient public school.

and the public school specifying the terms and conditions of the adoption, including the tasks and Tesponsibilities of the contracting parties. rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner 2 Memorandum of Agreement or Deed of Donation entered into by and between the Adopting Private Entity corporation or associations organized and operated exclusively for educational purposes in accordance with 3 Refers to aid/help/contribution/donation provided by an Adopting Private Entity to a public school in the form of, but not limited to, infrastructure, teaching and skills development, learning support, computer and 4 Contributions or gifts actually paid or made within the taxable year to or for the use of accredited domestic individual in an amount not in excess of ten percent (10%) in the case of an individual, and five percent (5%) in the case of a cornoration, ofthe taxpayer's taxable income derived from trade, business or profession science laboratories, and food and nutrition. as computed without the benefit of this and the following subparagraphs. However, donations to accredited of Internal Revenue, no part of the net income of which inures to the benefit of any private stockholder or

nongovernment institutions or entities organized and operated exclusively for educational, which no par following the procedures set forth in Section 34(H)(2)(c) of the Tax Code. of the net income of which inures to the benefit of any private individual, shall be deductible in full,

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ii. Exemption from donor's tax prescribed under Section 101 (A)(2) and

(B)(2) of the Tax Code.

An Adopting Private Entity shall refer to an individual engaged in trade or business or engaged in the practice of his profession or other business organizations, like a partnership, corporation or cooperative, either resident

towards providing much needed assistance and service to public schools. or non-resident, who/which teams up with the DepEd, or CHED, or TESDA,

importation of goods shall be assumed by the DepEd, or CHED, or TESDA. In the case of foreign donation, the VAT and excise tax, if any, on the

as the case may be, being the consignee or the importer thereof, except in cases where the importation is exempt from VAT under Section 109 of the

national government agency (namely, DepEd, CHED or TESDA) to the National Government arising from the subject foreign donation is deemed Tax Code. In this connection, VAT on importation payable by the concerned automatically appropriated and shall be considered as expenditure of the BY: w Ww.BMINTc.o government pursuant to the provisions of the Government Appropriation Act (GAA) as determined by the Congress on an annual basis.

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MAR 3 1 2025 S In the case of local donation considered as a "transaction deemed sale" of

A RMENT REVE properties under Section 106(B)(1) of the Tax Code. The said donor or the final consumer/end-user, and therefore, not entitled to any input VAT. Entity, the same shall be subject to VAT on the transfer of the said goods or goods or properties originally intended for sale by the Adopting Private Adopting Private Entity, however, is entitled to claim the available input tax subject to the rules on allocation among taxable sales, zero-rated sales and exempt sales. On the other hand, the donee-public school, shall be deemed as

If the local donation is not considered as a "transaction deemed sale." then the transfer of the goods or properties to the public school shall be exempt from VAT.

B Availment of tax exemption and incentives. --

i. For the exemption from donor's tax and deduction of donations and or certified true copy of the following documents to support and substantiate its claim: contributions from the taxable income for income tax purposes, the the period when the donation is made and deduction is claimed, the original Adopting Private Entity shall attach to its donor's tax return and ITR for

Duly notarized/approved agreement between the Adopting Private Entity and the public school, as endorsed by the National Secretariat;s

Duly notarized Deed of Donation and Acceptance; and

s Office composed of representatives of the three education agencies, namely the DepEd, CHED and TESDA, which will provide overall management and coordination of the Adopt-a-School Program.

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3 Sworn Declaration issued by the authorized officer of the Adopting

Private Entity as to the direct connection or relation of the expenses

provide a list of projects and/or activities undertaken and the cost of each undertaking, indicating in particular where and how the being claimed as deduction/donation to the Adopting Private Entity's participation in the program. The Adopting Private Entity shall

assistance has been utilized as supported by the agreement.

supporting documents to support the expenses for purposes of BIR post-audit. The Adopting Private Entity shall keep the official invoices and other

SECTION 4. Incentives granted to Technical-Vocational Institutions (TVIs) implementing a registered Enterprise-Based Education and Training (EBET) Framework under RA No. 12063. -

A. Incentives granted to TVIs. -- Enterprises implementing a registered EBET

Program, shall be entitled to the following tax exemptions and incentives:

A They shall be allowed to avail of an additional deduction from taxable income equivalent to 50% of actual training expenses from the effectivity of RA No. 12063 up to December 31, 2027: Provided, That starting January 1 2028, the additional deduction shall increase to seventy-five percent (75%)

of the actual training expenses: Provided further, That such deduction shall not exceed five percent (5%) of their total direct labor expenses, or P25,000,000.00 a year, whichever is lower. For this purpose, the enterprise shall secure the proper certification from the TESDA.

Y wu MAR 3-1: 2025 ERMEN TEVENUF SRA RERDS ii. Donations, contributions, bequests, subsidies, or financial aid actually paid provisions of the Tax Code. certification from the TESDA. or made to a TVI implementing theoretical instructions for EBET Programs shall be deductible from the gross income of the donor, subject to the For this purpose, TVIs shall not be required to obtain accreditation. notwithstanding any Iaw to the contrary, but they shall secure the proper Donations, contributions, bequests. subsidies, or financial aid made under within the taxable year shall be exempt from payment of donor's tax and

from taxes and duties. this section, which are certified by the TESDA to be actually, directly and exclusively for the conduct of a registered EBET Program, shall be exempt

B. Availment of tax exemption and incentives --

i.In availing of the additional deductions under item A(i) above, the enterprise shall attach the fo llowing documents in its ITR:

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1. Certification from TESDA; and

2 Sworn Declaration issued by the authorized officer of the enterprise as

to the amount of the expenses being deducted and that the enterprise has the requisite qualifications to avail of the incentives.

documents to support the expenses for purposes of BIR post-audit. The enterprise shall keep the official invoices and other supporting

ii. For the exemption from donor's tax and deduction of donations and

1 contributions from the taxable income for income tax purposes, the donor shall attach to its donor's tax return and ITR for the period when the donation CwBMUiT MAR 3 1 225 UREA SEMENEVEN is made and deduction is claimed, the original or certified true copy of the following documents to support and substantiate its claim:

1. Duly notarized Deed of Donation and Acceptance;

2 Certification from TESDA that the donations, contributions, bequests. .ros 7 subsidies, or financial aid are actually, directly and exclusively used for the conduct of a registered EBET Program.

The donor shall keep the official invoices and other supporting documents to support the expenses for purposes of BIR post-audit.

SECTION 5. Valuation of the assistance/contribution or donation made by private entities to educational institutions covered by these Regulations. -- The

Regulations shall be valuated as follows: assistance, contribution or donation made by private entities covered by these

A Cash assistance/contribution or donation

The amount of assistance/contribution or donation shall be based on the actual amount contributed/donated appearing in the official invoice issued by the donee.

B Personal property

value of the property. If the contribution or donation is in the form of personal property, the amount been used, then such valuation shall take into consideration the depreciated said assistance or contribution. However, if the said property had already of the contribution or donation shall be based on the acquisition cost of the

C Consumable goods

contribution or donation shall be based on the acquisition cost by the donor If the assistance is in the form of consumable goods, the amount of the or the actual cost thereof at the time of the donation, whichever is lower.

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D. Services

If the assistance is in the form of services, the amount of the contribution or donation shall be based on the value of the services rendered as agreed upon by the donor and the service provider and the educational institutions as fixed in the agreement, or the actual expenses incurred by the donor, whichever is Iower.

ABMNUNITE MAR 3:1.2025 T FAERN ENEN ECEAS F If the assistance is in the form of real property, the amount of the contribution or donation shall be the fair market value of the property at the time of the Real Property

contribution/donation, as determined pursuant to RA No. 12001 or Section 6(E) of the Tax Code, as the case may be, or the book value/depreciated value of the property, whichever is lower. Appraisal increase or appreciation in the

Coi H in computing the book value of the asset. value of the asset recorded in the books of account should not be considered

SECTION 6. Rules on availment of tax exemptions and incentives. -- In preparing the ITR, Applicants shall indicate the legal basis of the exemption and incentives availed of (i.e., RA No. 8525, RA No. 12063 or Section 294(C)(2) and (4) of the Tax Code) on the "Special Allowable Itemized Deductions" field of the ITR.

In addition, the availment of the above tax exemptions/incentives shall be mutually. exclusive and shall bar the Applicant's availment of any similar incentives granted by other general or special laws, rules or regulations.

information needed in the audit investigation/verification by the concerned investigating Government agencies granting incentives covered in these Regulations shall provide the list/matrix that will be submitted by the concerned parties shall be prescribed in a separate issuance. BIR a master list of entities with granted/cancelled incentives which contains the office of the BIR through the Audit Information, Tax Exemption and Incentives Division. within twenty (20) days following the close of each taxable quarter. The form of the master SECTION 7. Role of the government agencies granting incentives.

granted exemptions or tax incentives and their tax liability, if any. contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt purposes of ascertaining compliance with the conditions under which they have been Tax Code and RR No. 12-2018, any provision of existing laws, rules or regulations to the organizations or grantees of tax incentives shall be subject to examination by the BIR for SECTION 8. Conduct of Post audit of the BIR. -- Pursuant to Section 235 of the

incentives shall be deemed approved, provided that the Applicant has all the requisites to pending reguest for tax exemption with the BIR relating to the availment of the above qualify for the incentives. Moreover, the concerned Applicant shall submit the SECTION 9. Transitory Provision. -- Upon effectivity of these Regulations, any

6 Consolidated Revenue Regulations on Estate Tax and Donor's Tax Incorporating the Amendments Introduced by Republic Act No. 10963, Otherwise Known as Tax Reform for Acceleration and Inclusion (TRAIN} Law, January 25, 2018.

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disallowance of claimed expenses and tax exemptions. documentary requirements mandated under these Regulations to the BIR during audit to determine its compliance with the above provisions. Failure to comply shall result to

provision not affected by such declaration of invalidity shall remain in force and effect. declared invalid by a competent court, the remainder of these Regulations or any SECTION 10. Separability Clause. -- If any provision of these Regulations is

are hereby revoked, repealed or amended accordingly. orders, or portions thereof which are inconsistent with the provisions of these Regulations SECTION 11. Repealing Clause. -- The provisions of any regulations, rulings or

(15) days following its publication in the Official Gazette or in the official BIR website, whichever comes first. SECTION 12. Effectivity Clause. -- These Regulations shall take effect fifteen

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