BIR Ruling

September 27, 1972 Eastman Research Laboratories, Inc. No. 14 Ilang-Ilang St. Cubao, Quezon City Attention: Mr . Dionisio Buencamino Secretary Gentlemen : This refers to your request for tax-exemption under Republic Act No. 2067 as amended by republic Act No. 3589. It is represented that the Eastman Research Laboratories, Inc. (hereinafter referred to as the Foundation) is registered with the Securities and Exchange Commission as a non-stock, non-profit domestic corporation organized for the primary purpose of conducting and operating a textile research institute to help and assist the textile industry and to this end establish a research laboratory for the study in research and analysis of textile fibers and fabrics. In reply, thereto, I have the honor to inform you that by express provisions of Sections 23 and 24 of Republic Act No. 2067, as amended by Republic Act 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 science, 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." acd 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 National Science Development Board to the effect that the Eastman Research Laboratories, Inc. qualifies as a foundation established for scientific advancement as well as specific research and development projects within the contemplation of Republic Act. No. 2067 as amended by Republic Act 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 and donee's gift 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. cdtech Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue