BIR Ruling

February 27, 1969 Packaging Institute of the Philippines Room 207, Far East Building Buendia Avenue, Makati, Rizal Attention: Mr . Eulogio Y . Enriquez President Gentlemen : This refers to your letter dated February 5, 1969 requesting information on the following questions, viz: Whether or not the cash donations to Packaging Institute of the Philippines are deductible from the income tax of the contributing corporation; and whether or not those cash donations are taxable income to the said Institute. aisadc In reply, I have the honor to inform you that pursuant to Section 30 of the Tax Code, the following shall be allowed as deductions from gross income: "Sec. 30(h). Charitable and other contributions . Contributions or gifts actually paid or made within the taxable year to or for the use of the Government of the Philippines or any political subdivision thereof for exclusively public purposes, or to domestic corporations or associations organized and operated exclusively for religious, charitable, scientific, athlete, cultural or educational purposes or for the rehabilitation of veterans, or to societies for the prevention of cruelty to children or animals, no part of the net income of which inures to the benefit of any private stockholder or individual to an amount not in excess of six per centum in the case of an individual, and three per centum in the case of a corporation, of the taxpayer's taxable net income as computed without the benefit of this paragraph. Such contributions or gift shall be allowable as deductions only if verified under the rules and regulations prescribed by the Secretary of Finance. Contributions by corporations to a non-profit organization such as the Packaging Institute of the Philippines dedicated to the propagation and upliftment of packaging as a profession and for the benefit of the packaging industry and consumers in the Philippines do not fall under the deductions in Section 30(h) and therefore cannot be allowed as deductions. Granting that the contributions are motivated by a benevolent and laudable purpose for a worthy cause, yet, the above section is explicit on what contributions are considered charitable or to be properly deductible from the taxpayer's gross income. Evidently, these contributions to the Institute do not come within the purview of Section 30(h) of the Tax Code. Such cash donations, however, do not constitute taxable income to the Institute especially more so when the same are to be used for awards as trophies and plaques to deserving competitors in the forthcoming Packaging Competition. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue