BIR Ruling

August 9, 1976 St. Paul College Dumaguete City Attention: Sister Maria Macarius, SPC President Gentlemen : This refers to your letter dated September 23, 1975 informing this Office of your project known as the SPCD Endowment Fund which was established to finance your educational activities, and in connection therewith posed the following questions: "1. Presidential Decree No. 507 seems to apply to our case. Where do we secure the permit or certification which would enable the donor to claim for tax exemption in his income tax for the donation given to SPCD Endowment Fund? "2. Would the donation given be taxed? "3. What are some of the limitations on the allocations or purposes to which the Endowment Fund may be spent?" In reply, I have the honor to inform you that Presidential Decree No. 507 does not apply to your case as you, the donee or legatee, is neither a social welfare, cultural or charitable institution as defined in Section 3(a)(b)(c) of Revenue Regulations No. 8-74, the regulation implementing said decree. However, donations to the Endowment Fund are exempt from the donor's gift tax, in accordance with Section 112(a)(3) of the Tax Code, provided that not more than 30% of said gifts are used for administration purposes and provided further that your College is a non-stock and non-profit educational corporation, paying no dividends, governed by trustees who receives no compensation and devoting all its income to the accomplishment and promotion of the purposes enumerated in its articles of incorporation. Moreover, contributions to the fund are also deductible in full from the gross income of the contributor, for income tax purposes, provided that the St. Paul College is a college recognized by the Government and the contribution is not for the payment or granting of salary increases, bonuses, or personal benefits to any of its school officials, faculty and personnel. (Sec. 30(h)(1), Tax Code) Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."