BIR Ruling No. 292-2016

BUREAU OF INTERNALREVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Ouezon City

XXY

10-2003 R.A.No.8525 amended: Code of 1997, as Section 34 (H) 2) of the Tax RR 000-00 #292-2016 -27-2016 Person to Contact: Chief, Law Division Tel. Nos. 926-55-36/ 927-09-63

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

Attention: AMADO C.BERNARDINO

Asst. General Manager-Management Services

Gentlemen:

Bata in Bayanihan Elementary School, Marilog District, Davao City for the Year additional fifty percent (50%) special deduction to be deducted from the donor's gross income under Republic Act (R.A.) No.8525 (Sponsorship of Tuloy ang Pasko ng mga 2011) This refers to your letter dated August 1, 2012, requesting for a ruling on the

Documents submitted disclosed that Alsons Development and Investment Corporation (TIN: ) is a domestic corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. that Alsons Development and Investment Corporation entered into Memorandum of Agreement (MOA) with the Department of Education (DepEd). whereby the former continue to support to the latter "Adopt-A-School Program" by supporting the DepEd in achieving an enhanced learning environment and addressing the dire shortage of resources in public schools through the provisions of personal belongings of children

Corporation executed a Deed of Donation in favor of Bayanihan Elementary School. the 181 pupils: that on December 16, 2011, Alsons Development and Investment (underwear, slippers and clips). magician and clown, tubes of ice cream and toys of

personal belongings, food and educational toys amounting to pesos (F and that on February 24,2012.Br.Armin A

Luistro FSC, Secretary of the Deped indorsed the application for tax incentive of

Alsons Development and Investment Corporation relative to its donation, 100% of

which amounts to plus an additional 50% which is equivalent to

704.00 for a total amount of

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#292-2016

Page 2 of 4 Alsons Development and Investment Corporation 6-27-2016

In reply,please be informed that under Section 34(H2a of the Tax 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 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,viz.

"(a) Donations to the Government. Donations to the

Government of the Philippines or to any of its agencies or political

subdivisions, including fully-owned government corporations, exclusively

to finance, to provide for, or to be used in undertaking priority activities in

education, health, youth and sports development, human settlements,

science and culture, and in economic development according to a

National Priority Plan determined by the National Economic and

Development Authority (NEDA), in consultation with appropriate

government agencies, including its regional development councils and

private philanthropic persons and institutions: Provided, That any

donation which is made to the Government or to any of its agencies or

political subdivisions not in accordance with the said annual priority plan

shall be subject to the limitations prescribed in paragraph (l) of this

Subsection."

Moreover, National Economic Development Plan (NEDA) Circular No. 01-

2009 provides the guideline for the issuance of certification of programs, projects and

activities in the National Priority Plan (NPP), to wit:

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

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

a. PPA that is included in the NPPP but has not yet

received any donation; and

h. PPA that is included in the NPP and to which donation

has been made prior to inclusion; provided that the immediately

following item no. 2 has been complied with.

2. Request for certification shall be submitted to NEDA Central

Office for evaluation not later than 31 December of the taxable year when

donations were made so that approved tax deductions could be claimed

during the succeeding year at the time of filing of income tax returns.

Attached to the records is a letter from Mario A. Deriquito, Undersecretary of

the Department of Education (DepEd) dated July 6, 2015, that it was only in2012.

when the Adopt a School Secretariat was able to secure the formal Certification from

the NEDA that the Adopt a School Program of the DepEd is included in the National

Priority Plan of the Government.

Considering that "Adopt-A-School Program was only certified to be included

O4239 in the NPP in 2012, thus,thedonations made by Alsons Development and Investment

Page 3 of 4 Alsons Development and Investment Ccrporation #292-2016 6-272016

an amount not exceeding 5% in the taxpayer's taxable net income as computed under Section 34 (H)(2)(a of the Tax Code of 1997, as amended. Corporation on December 16, 2011 is subject to limited deductibility or deductions to

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

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 fifty percent (50%) of such expenses. "SEC.5. Additional Deduction for Expenses Incurred for the

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

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

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

fifty percent (50%) of such contribution/donation subject to the following conditions: 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 contribution/donation that were actually, directly and exclusively incurred (a Deduction from the gross income of the amount of

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

2 That the taxpaver can substantiate the deduction with sufficient evidence, such as official receipts or delivery receipt and other adeguate records -

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

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

the adopting private entity's participation in the Adopt-a-

School Program. The adopting private entity shall also

provide a list of projects and/or activities undertaken and

042394 and how the assistance has been utilized as supported by the cost of each undertaking, indicating in particular where

the Agreement; and

Alsons Development and Investment Corporation Page 4 of 4 #292-2016 27-2016

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

school.

(3)That the application,together with the approved Agreement

over the property, if the contribution/donation is in the form of real District Office (RDO) having jurisdiction over the place of business of the donor/adopting private entity, copy furnished the RDO having jurisdiction endorsed by the National Secretariat, shall be filed with the Revenue

property.

In view of the foregoing, the request for the additional fifty percent (50%) special deduction to be deducted from the donor's gross income, is hereby granted.

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

Very truly yours.

KIM S.JACINTO-HENARES

K-1-JRC Commissioner of Internal Revenue 042394 JUN 4 2016