BIR Ruling

October 25, 1977 Dr. Rita Pardode Tavera 2 Urdaneta Village Makati, Rizal M a d a m : This refers to your request in effect for a certification on behalf of the Alay Kapwa Kilusan Pangkalusugan (AKAP), Inc. as a donee or legatee entitled to the benefits provided for in Presidential Decree No. 507. The documentary evidence submitted show that the Alay Kapwa Kilusan Pangkalusugan AKAP), Inc., is a non-stock, non-profit organization duly registered with the Securities and Exchange Commission; that the organization is considered a social welfare organization as defined in Section 3(a) of Revenue Regulations No. 8-74 the regulation implementing Presidential Decree No. 507; and that no part of its net income inures to the benefit of any of its members. As the Organization is a social welfare organization pursuant to Presidential Decree No. 507, all gifts, bequest, donations, and/or contributions to that Organization are exempt from the donor's and estate taxes and shall be deductible in full in computing the taxable net income of the donor subject to the condition that not more than 30% of the donation or bequest shall be used by that Organization for administration purposes. However, in order that organization may maintain its status as a qualified recipient of tax free donation, it should file within three months from the end of its fiscal or calendar year period an annual information return, with the Chief, Legal Branch of the Regional Office having jurisdiction over the principal address of the organization to which shall be attached the following: (a) A list of the donations land bequests received during the year, which should show the name and address of the donors or testators, the amount or market value of each donation or bequest and the disposition thereof. The list should be certified to by the president or treasurer of the organization; (b) A list of the activities and/or projects undertaken by the organization and the cost of each undertaking or project, which should also be certified to by the president or treasurer of the organization; (c) A certification by the president or treasurer of the organization that not more than thirty per centum (30%) of the total gifts, bequest and donations received during the year was used for administrative purposes; (d) A certification by the president or treasurer of the organization that no part of its net income inures to the benefit of any private stockholder or individual. (Sec. 9, Revenue Regulations No. 8-74 dated September 24, 1974). Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-D2567-D1025-A-2