BIR Ruling

October 10, 1975 Sister Maria Macarius, SPC President St. Paul's College Dumaguete City M a d a m : In connection with your letter dated September 23, 1975 to the Chief, Legal Department, Bureau of Internal Revenue, Manila, and its enclosures, a copy of which was furnished this Office, I have the honor to inform you that in accordance with Presidential Decree No. 507, as implemented by Revenue Regulations No. 8-74, the benefits prescribed by said decree may be availed of by the donor or legatee as a social, cultural or charitable institution by establishing its qualification by filing with the Commissioner of Internal Revenue an Affidavit showing the character of the organization, the purpose for which it was organized, its actual activities, the source of its income is credited to surplus or inures or may inure to the benefit of any private stockholder or individual and in general, all fact relating to its operation which affect its qualification. The such Affidavit should be attached a copy of the charter or articles of incorporation, by-laws, and the latest financial statement showing the assets, liabilities, receipts, and disbursements of the organization. cdta Donation to the social welfare, cultural and charitable association established as such and duly registered with the Bureau of Internal Revenue are exempt from the donor's tax and the donor shall be allowed to deduct in full such donation from his gross income for the year the donation is actually received. Said donation shall not be included or added to charitable contribution allowed by Section 50 (h) of the Tax Code but will be authorized deduction as independent and separate from the same, however, the donor should submit evidence showing: (1) Actual receipt by the donee of the donation and the date of receipt thereof; (2) The amount of the donation, if in cash, if real property was donated, the value thereof at the time of the donation, which should be based on the assessor's valuation under Presidential Decree No. 76. Furthermore, the donee should not utilize more than 30% of the donation for administration purposes. There are other formal requirements like the filing of notice of donation or legacies within a certain period and of the annual information returns and its enclosures, failure to comply with which may subject you to certain penalties and for your further information please refer to the above-mentioned Revenue Regulations No. 8-74. aisa dc Please be guided accordingly. Very truly yours, (SGD.) REYNOSO B. FLOREZA Regional Director TAN-1227-619-2