BIR Ruling

January 25, 1973 Mrs. Ruth G. Prudente Executive Director Kapatiran-Kaunlaran Foundation, Inc. 937 P. Paredes St., Sampaloc Manila M a d a m : This refers to your request for tax-exemption of Kapatiran-Kaunlaran Foundation, Inc. as an entity organized for scientific purpose under Republic Act No. 2067, as amended by Republic Act No. 3589. cdta It is represented that the Kapatiran-Kaunlaran Inc. (hereinafter referred to as the Foundation) is registered with the Securities & Exchange Commission as a non-stock, non-profit, non-political, non-sectarian and a charitable organization, having among its purposes the following: a) to undertake and carry-out plans and projects geared towards the totality of man's development; b) to provide assistance to all sectors of community particularly those from the economically depressed and socially under-privileged groups; c) to establish and maintain cultural, recreational and educational service centers or institutions and social services for purposes of dispensing instruction and education on various aspects of family life; d) to extend assistance to the poor and the handicapped segments of the community in adjusting themselves to the requirements of an industrialized society; and e) to conduct, finance and assist educational, cultural, social and scientific research projects. In reply thereto, I have the honor to Inform you that by express provisions of Sections 23 and 24 of R. A. No. 2067, as amended by R. A. No. 3589 which read thus: "Sec. 23. The Board and its agencies as well as the University of the Philippines are hereby authorized and empowered to receive grants, bequests and donations made or given for the purpose of aiding scientific and technological investigations or establishing scholarship or professional chairs in the fields of sciences, engineering and technology. Such grants, bequests and donations as well as those received by public or recognized private educational institutions, shall be tax-exempt and deductible from the income tax returns of the donor upon certification of the Board or the University of the Philippines in case it is the donee, that said grants, bequests and donations are dedicated to the purpose above mentioned, any provision of law rule or regulation to the contrary notwithstanding." "Sec. 24. The Board shall promote and, in its discretion, assists in the establishment of private foundations for scientific advancement as well as specific research and development projects by private individuals, firms and institutions. All funds contributed to the support and maintenance of such foundations and their projects as well as specific research and development projects undertaken by private individuals and educational institutions, shall be tax-exempt and deductible from the donor's income tax returns, upon certification by the Board that such foundations and funds are dedicated to scientific pursuits. All income of whatever kind and character which such foundations may derive from any of their properties, real or personal, or from their investments shall also be tax-exempt." a private foundation established for scientific advancement as well as specific research and development projects by private individuals, firms and institutions, when certified to as such by the National Science Development Board (NSDB) shall be exempt from the income and gift taxes. In view thereof, and considering that a certification was issued by the NSDB to the effect that the Kapatiran-Kaunlaran, Inc. qualifies as a foundation established for scientific advancement as well as specific research and development projects within the contemplation of R. A. No. 2067 as amended by R. A. No. 3589 this Office is of the opinion as it hereby holds that the said foundation is entitled to all the benefits and privileges provided for by said Act, as follows: 1. All funds contributed to the support and maintenance of the Foundation and its projects shall be exempt from the donor's taxes; 2. All income of whatever kind and character which the Foundation may derive from any of its properties, real or personal or from its investments shall be tax-exempt; 3. The grants, bequests and donations received by the Foundation are exempt from income tax; and 4. All such grants, bequests and donations made in favor of the Foundation are deductible in full from the income tax returns of the donors without the limitations provided for in Section 30(h) of the Tax Code, as amended. cdt Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5