BIR Ruling No. 491-2017

KETYBI lCGF IHF PHIPPINFS

DPYRLNULNEMANO BUREAU OF INTERNAL REVENUE

Quezon City.

BIR Ruling No. 292-2016 RA No. 8525 Section 34(H)(2). Tax Code of 1997

491-2017 10-23-2017 FGP Corporation 3/F Benpres Building Exchange Road corner Meralco Avenue Ortigas Center

Attention: Maria Carmina Z. Ubana VP and Comptroller

Gientlemen:

donation in the amount of Corp. for the availment of the exemption from donor's tax and deductibility of thc (DepEd), in accordance with Republic Act (RA) No. 8525. otherwise known as thc "Adopt-A-School Act of 1998. This rcfers to your letter dated February 22. 2016. requesting on behalf of FGP made in favor of the Department ot' Education

Corp. relative to the above-donation, 100% of which amounts to additional 50% thereof amounting to and that per Certification dated January 27, 2015 issued by the NFDA. the Adopt-A- Government for the year 2015. training, provision of education supplies. infrastructure support as well as support for of DepEd for and in behalf of Sta. Rita Karsada Elementary School. Sta. Rita Aplaya Elementary School and Sta. Clara Elementary School. whereby the former donated to the latter the FGP Education Program amounting to Luistro I SC. Secretary of the DepEd. indorsed the application for tax incentives of FGP School Program is considered a Priority Project in the National Priority Plan of the Commission (SEC) under SEC Registration No. First Gas Power Corp. and FGP Corp. entered into a Memorandum of Agreement and weliness programs like milk fecding and preventive dental health care. teachcr school extra-curricular activities to ensure school participation of students: that pursuant to said MOA, FGP Corp.- through its Vice President for External Affairs and Security, Ramon J. Araneta, executed on October 16. 2015 a Deed of Donation in favor (MOA) with the DepEd whereby the former proposed to DepEd the provision of health Based on the documents submitted, it is shown that FGP Corp. (TIN is a domestic corporation duly registered with the Securities and Exchange for a total amount of that on March 17. 2014. ; that Br. Armin A. plus an

donations not in accordancc with the National Priority Plan are subject to limited 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. In reply. please be informed that under Section 34 (H) (2) (a) of the Tax Code

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without the benefit of this deduction. 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

the 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

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. 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

expenses incurred by the adopting entity: which provides for the guidelines in the availment of the additional deduction for the The above provision is implemented by Revenue Regutations (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

percent (50%) of such contribution/donation subject to' the following contribution/donation that were actually, directly and exclusively incurred 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:

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

contributed/donated property by the recipient public school. (2.3) Proofor acknowiedgmentof receiptof the

FGP Corp./Adopt-a-School Program Pape 3 of 3 491-2017 10-232017

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

(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.

No. 292-2016 dated June 27, 2016) under Section 3 of RR 10-2003, the amount it actually, directly and exclusively incurred gross income, plus an additional deduction equivalent to fifty percent (50%) thereof in for the FGP Education Program, amounting te the amount of Accordingly, since FGP Corp. is compliant with the requirements sct forth or a total deductible amount of is fully deductible from its (BIR Ruling

Lastiy, the FGP Corp. Education Program amounting to is likewise 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)

However, 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.

Very truly yours.

1cu a

Commissioner of Internal Revenue CAESAR R. DULAY

My 010133

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