RR No. 9-2020 — Implements Section 4 (Z) and Section 4 (EE) of RA No. 11469 (Bayanihan to Heal as One Act) by granting further benefits on donations during the period of Enhanced Community Quarantine in relation to the NIRC of 1997, as amended (Published in Manila Bulletin on April 8, 2020)

B E BUREAU OF INTERNAL REVENUE Republic of the Philippines Department of Finance National Office Quezon City APR 07 2020 8:00AM G

April 6,2020

REVENUE REGULATIONS NO. 9-2020

SUBJECT: IMPLEMENTING SECTION 4(Z) AND SECTION 4(EE) OF

REPUBLIC ACT NO.11469,OTHERWISE KNOWN AS THE "BAYANIHAN TO HEALAS ONEACT"BY GRANTING FURTHER BENEFITS ON DONATIONS DURING THE PERIOD OF THE ENHANCED COMMUNITY QUARANTINE (ECQ)IN RELATION TO THE NATIONALINTERNAL REVENUE CODE (NIRC)OF 1997,AS AMENDED.

TO: ALLINTERNAL REVENUE OFFICERS AND OTHERS CONCERNED

Section 1.PURPOSE AND OBJECTIVE.-Under Section 3 of R.A.No 11469,otherwise known as the Bayanihan to Heal as One Act.the National Government acknowledges the need to urgently adopt policies to combat the rising cases of COVID 19 in the Philippines.Sec.3gand 3h)of the Declaration of Policy of R.A.No 11469 states,thus

Section 3. Declaration of Policy- The COVID-19 pandemic has greatly affected nations worldwide, including the Philippines, and has caused and is continuing to cause loss of lives and disruption to the economy. Thus, there is an urgent need to: XXXXXXXXX g) partner with the private sector and other stakeholders to deliver these measures and programs quickly and efficiently; and

challenging times. (h promote and protect the interests of all Filipinos in these

XXX XXX XXX

Currently,the private sector has taken the bold step of working side-by-side with various stakeholders to heed the government's call in the fight against COVID- 19.In true "bayanihan spirit" the private sector is at the forefront of contributing financial assistance and giving donations in kind to our frontliners, including Personal Protective Equipment (PPE).which under said law,refers to gloves,gowns,masks goggles,face shields,surgical equipment and supplies,laboratory equipment and its

reagents, medical equipment and devices,support and maintenance for laboratory

and consumables such as alcohol, sanitizers, tissue, thermometers, hand soap and medical equipment, surgical equipment and supplies;medical supplies,tools

detergent, sodium hydrochloride. cleaning materials. povidone iodine, common medicines (e.g.,paracetamol tablet and suspension,mefenamic acid,vitamins tablet and suspension, hyoscine tablet and suspension, oral rehydration solution, and cetirizine tablet and suspension);testing kits,and such other supplies or eguipment as may be determined by the DOH and other relevant government agencies, to affected stakeholders.

Thus, in accordance with Section 244 of the National Internal Revenue Code NIRC of 1997,as amended,in relation to Sections 101 and 34 H thereof,the following regulations are hereby issued to implement Sec.4(z) and Section 4(ee of R.A.11469, while adopting the government policies as embodied under Sec.3g) and Sec.3(h)thereof.

Section 2.BASIS.-Under Sec.4z)and 4ee)of R.A.114969,the President is authorized to adopt the following measures to respond to the crisis brought about by the COVID 19 pandemic:

() Move statutory deadlines and timelines for the filing and submission of any documents, the payment of taxes fees and other charges

required by the law,and the grant of any benefit,in order to ease the burden on individuals under the Community Quarantine

XXX XXX XXX; XXXXXXXXX XXX XXX XXX XXX XXXXXX XXX XXX XXX:

(ee) necessary to enable the President to carry out the declared national Undertake such other measures as may be reasonable and

policy subject to the Bill of Rights and other constitutional guarantees. (Emphasis supplied)

On the other hand,Sections 101 and 34H)of the NIRC of 1997,as amended allow exemption from donor's tax and full deductibility from gross income of gifts or donations made in favor of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of said Government,or made in favor of an educational and/or charitable,religious,cultural or social welfare corporation, institution, accredited non-government organization trust or philanthropic organization or research institution or organization.

Section 3.FULL DEDUCTIBILITY OF SPECIFIC DONATIONS/GIFTS ALREADY EXEMPT FROM DONOR'S TAX UNDER THE LAW-BaSed on the law it is hereby declared that the following specific donations/gifts made in accordance with Section 101,as implemented by Revenue Regulation No.12-2018.and Section 34H).both of the NIRC of 1997.as amended,when given for the sole and exclusive purpose of combatting COVID 19 during the period of the state of national

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emergency under R.A.No.11469,shall be considered fully deductible against the gross income of the donor-Corporation/donor-individual:

(a) Cash donations;

(b Donations of all critical or needed healthcare equipment or supplies as

enumerated above;

c Relief goods such as,but not limited to,food packs (rice,canned goods

noodles,etc. and waterand

(d Use of property,whether real or personal (shuttle service,use of iots/ buildings):

To be entitled to full deductibility, said donations shall be made to any of the following donees as enumerated under Sections 34 (H.in relation to Section 101 of the NIRC of 1997,as amended.and as implemented by Section 17 of Revenue Regulation No. 12-2018, namely

1. National Government or any entity created by any of its agencies including

public hospitals which is not conducted for profit, or to any political subdivision of the said Government, including fully-owned government corporations; and

2. Accredited non-stock,inon-profit educational and/or charitable, religious cultural or social welfare corporation,institution,foundation,non-govermment

organization, trust or philanthropic organization and/or research institution or organization.

Moreover, donations of any of the above items to the National Government or to any of its agencies or political subdivisions, including fully-owned government corporations,for the sole and exclusive purpose of combatting the COVID-19,shall be allowed full deductibility.regardless if covered by the National Economic and Development Authority (NEDA's annual priority plan, considering that such donations are made during State of Public Health Emergency and State of Calamity as declared by no less than the President per Presidential Proclamation Nos.922 and 929,series of 2020

with for this purpose. The requirement of submission of a Notice of Donation shall be dispensed

Supporting Documents.- In order to be fully deductible and allowable as an expense against the gross income of the donor-Corporation and/or donor- individual, said exempt donation/gifts shall be supported by the following

Section 34H)2(c of the NIRC of 1997 as amended,organized and operated exclusively for (NGO) shall refer to a non-stock. non-profit domestic corporation or organization as defined under scientific. research, educational, character-building and youth and sports development, health Under Revenue Regulations No.13-98.as amended. accredited non-government organization

social welfare cultural or charitable purposes,or a combination thereof,no part of the net income of which inures to the benefit of any private individual.

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documents

subdivision of the said Government. institution foundation non-government National government or any entity not conducted for profit including public hospitals, or to any political organization,trust orphilanthropic organization and/or research institution or organization. created by any of its agencies which is including corporations. educational and/or charitable,religious, cultural or social welfare corporation Accredited fully-owned Donee-Recipient non-stock government non-profit Deed of Donation 2322) Certificate of Donation(BIR Form Supporting Document

Section 4.OTHER DONATIONS/GIFTS EXEMPTED DURING THE PERIOD

given to the following donees: (b.(c and/or (d) under the immediately preceding section,when made during the period of the state of national emergency, for the sole and exclusive purpose of combatting COVID 19,shall also be considered as exempt donations/gifts,when OF THE STATE OF NATIONAL EMERGENCY.-Furthermore,donations of (a

1.Private hospitals and/or non-stock non-profit educational and/or charitable. religious, cultural or social welfare corporation, institution, foundation, non-

organization and/or research institution or organization; and government organization (even if non-accredited, trust or philanthropic

2. Localprivatecorporations,civicorganizations,and/or international

organizations/institutions provided that they shall (1. actually, directly and exclusivelydistribute and/or transfer said donations/gifts to,and/or (2. partner as conduit logistical machinery with, the accredited NGOs and/or national government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government

The exemption from donor's tax of the donations/gifts referred to in herein Section

enumerated under Section 6 hereof. shall be subject to the timely submission of the documentary requirements

DURING THE PERIOD OF THE STATE OF NATIONAL EMERGENCY FOR THE Section 5.DEDUCTIBILITY OF OTHER DONATIONS/GIFTS MADE

SOLE AND EXCLUSIVE PURPOSE OF FIGHTING COVID-19-AII donations/gifts under Section 4 hereof when made during the period of the state of national individual and subject to the timely submission of documentary requirements as enumerated under Section 6 hereof. emergency,for the sole and exclusive purpose of fighting COVID 19 shall also be deductible in full against the gross income of the donor-Corporation and/or donor-

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However donations/gifts under Section 42 hereof which qualify for full deductibility pursuant to Section 34(H(2)(b)of the National Internal Revenue Code NIRC. as amended referring to donations/gifts to foreign institutions or international organizations, shall not be subject to the documentary reguirements referred to under Section 6.but shall be subject to verification rules under Section 34(H)(4) of the NIRC

deductible when the requirements for documentation below are complied with: Section 4 hereof, shall only be considered exempt from donor's tax and fully Section 6.DOCUMENTARY REQUIREMENTS.-Donations made under

Recipient Donee- Requirements for Documentary Documentary Requirements for Donor

and/or charitable religious,cultural or social welfare stock non-profit institution, government philanthropic Accredited educational trust corporation foundation. organization non- non- o 1 Liquidation report Donee-Recipient (Annex A) 1Sworn executed by the President of the donor-Corporation or any of its authorized officers or by the donor- individual himself, stating the name of the donee, the date of donation to fight COVID 19 during the period together with proof of purchase if the value of the donation and stating that the donation was made solely for the purpose of supporting efforts of the state of national emergency donation is in kind) CertificationAnnex B)

organization and/orresearch organization institution or 2 BIR-registeredAcknowledgement Annex C hereof Receipt or the template for an acknowiedgement receipt under

profit educational and/or charitable religiouscultural or social welfare Non-stock corporation non-

institution, foundation, non-

exclusively government (even accredited include operated organization organized those non- and for to

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healthpurposes such as private hospitals, trust or

organization and/orresearch philanthropic

institution organization

Local organizations/ institutions partner to serve as conduit with international accredited NGOs corporations and/or national private who O 1 2 Liquidation report Deed of Donation. (Annex A) Certificate Donation Form 2322) (BIR O of 1 2 Proof of purchase (if donation is in Certificate of Donation BIR Form 2322 or Deed of Donation duly respectively in the name of the donor-corporation/individual. issued by the accredited NGO or government kind) institution

said Government government any entity created by any of its agencies which is not conducted for profit or to any political subdivision of the O 3 BIR-registered Acknowledgement Receipt or the template for an acknowledgement receipt under Annex C hereof to be issued by the ultimate beneficiary

These documentary requirements shall be submitted to the respective Revenue District Office (RDO where the donor and the donee-recipient are registered in accordance with the form attached within sixty (60) days from the lifting of the Enhanced Community Quarantine (ECQ)

Section 7.VALUE ADDED TAX(VAT)TREATMENT OF DONATIONS IN KIND.-Donations of (b) and c) under Section 3 hereof shall not be treated as a transaction deemed sale subject to VAT under Section 106(B of the NIRC,as amended.Furthermore,any input VAT attributable to such purchase of goods shall be creditable against any other output tax.

Section 8.POWER OF THE BIR TO VERIFY EXEMPTION AND DEDUCTIBILITY OF SAID DONATIONS THROUGH INVESTIGATION OR AUDIT -The benefits granted under this Revenue Regulation shall be subject to power of the BIR under Sec.235 of the NIRC,as amended,to examine any books of accounts and other pertinent records of tax-exempt organizations or grantees of tax incentives for purposes of ascertaining compliance with the conditions under which they have been granted exemptions or tax incentives and their tax liability if any

Section 9. APPLICABILITY.-The rules on donation and deductibility of the same as provided in the NiRC,as amended,and other Revenue Regulations shall apply suppletorily.

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Section 10.REPEALING CLAUSE.-Any laws,rules and regulations

hereby repealed, amended or modified accordingly during the effectivity of R.A.No. issuances or parts thereof inconsistent with the provisions of these regulations are 11469,otherwise known as the "Bayanihan to Heal as One Act.

March 16,2020 upon issuance of Presidential Proclamation No.929 and shall be Section 11. EFFECTIVITY.These regulations shall take effect starting

in full force only during the three 3)month effectivity of R.A.No.11469.otherwise known as the "Bayanihan to Heal as One Act".unless extended or withdrawn by Congress or ended by Presidential Proclamation

The Office of National Administrative Register (ONARof the UP Law Center shall be provided three (3) certified copies of this Revenue Regulations.

CARLOS G.DOMINGUEZ I Secretary of Finance

APR 06 2020 Recommending Approval:

Commissioner of Internal Revenue CAESAR R. DULAY

0338 23

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ANNEXA

LIQUIDATION REPORT

CASH (Corporati Individual) Donor o Received by Donee Date Amount ment Receipt No. Acknowledge- Beginning Balance Amount of Utilization Beneficiary Recipient Donee- Balance End

N 2 3 4

GOODS/EQUIPMENT

(Corporation/ Individual) Donor Received by Donee Date Particulars/ Description Value Acknowledgement Receipt No. Beneficiary Recipient/ Donee-

1 2 3

5 4

Prepared By

Certified Correct By

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8

ANNEX"B"

FOR CORPORATION

REPUBLICOF THE PHILIPPINES )S.S.

SWORN CERTIFICATION

I, (name). (citizenship), of legal age, and with office address at (full address), being duly sworn, hereby depose and state that:

1.I am the (position) of name of the Company(the "Company),with principal

address at (address of the Company);

2. On (date we made a donation in cash/in kind to (name of donee,(which comprises of (particulars, if in kind]):

3.The (amount/value) of said donation is Php(amount/value):

4 Our donation was made for the sole and exclusive purpose of assisting (donee) in

the fight against COVID 19

IN WITNESS WHEREOF.I have here unto set my hand on this day of

in Philippines

President/Authorized Representative

SUBSCRIBED AND SWORN TO before me on this in issued on Philippines, affiant at exhibiting day of to me his

Notary Public

Doc No. Page No. Series of 2020. Book No

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FOR INDIVIDUAL

REPUBLICOF THE PHILIPPINES) ) S.S.

SWORN CERTIFICATION

I, (name). (citizenship), of legal age, and with residential address at (full address). being duly sworn, hereby depose and state that

1 On (date).I made a donation (in cash/in kind to (name of donee.(which

comprises of (particulars, if in kind]):

2 The (amount/value) of said donation is Php(amount/value);

3.If pooled donation only Out of the total donation, Php(amount/value) was my

personal contribution;

4 My donation was made for the sole and exclusive purpose of assisting (donee) in

the fight against COVID 19

IN WITNESS WHEREOF,I have here unto set my hand on this in Philippines. day of

Name of Individual

SUBSCRIBED AND SWORN TO before me on this in issued on Phitippines, affiant at exhibiting day of to me his

Notary Public

Doc No. Page No. Book No. Series of 2020

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ANNEX "C"

FOR CASH

ACKNOWLEDGEMENT RECEIPT

This is to acknowledge receipt on Php(amount) from(Corporation/Individual) of cash in the total amount of

Authorized Representative

FOR GOODS

ACKNOWLEDGEMENT RECEIPT

from (Corporation/Individual) This is to acknowledge receipt on of goods in the total amount of Php(amount) of (quantity and description

Authorized Representative

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1