BIR Ruling

June 19, 1968 Messrs. Sycip, Gorres, Velayo & Co. Certified Public Accountants 6760 Ayala Avenue Makati, Rizal Attention: Mr . B . V . Abela Gentlemen : This refers to your letter, dated May 23, 1968, requesting in behalf of one of your clients for confirmation that a private institution or foundation duly established under Republic Act No. 2067, otherwise known as the Science Act of 1958, as amended by Republic Act No. 3589, for scientific advancement as well as specific research and development projects by private individuals, firms and institution, when certified to as such by the National Science Development Board, will enjoy the following tax benefits enumerated in your said letter: "1. All funds contributed to the support and maintenance of such institution or foundation and its projects shall be exempt from the donor's and donee's gift taxes, upon certification by the Board that such institution or foundation and funds are dedicated to scientific pursuits; "2. All income of whatever kind and character which such institution or foundation may derive from any of its properties, real or personal, or from its investment, shall also be tax-exempt; "3. The grants, bequests and donations received by the private institution or foundation undertaking scientific research and development projects are likewise exempt from income tax on the part of the donee institution or foundation, upon certification of the National Science Development Board; and "4. All such grants, bequests and donations made in favor of the qualified institution or foundation are deductible in full from the income tax returns of the donors without the charitable contribution limitations applicable to individual or corporation as the case may be upon certification of the National Science and Development Board." 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, 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 assist 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 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." 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 will enjoy the above first three enumerated tax benefits and tax exemptions and the grants, bequests and donations made in favor of the qualified institution or 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, upon certification by the Board that such foundation and funds are dedicated to scientific pursuits. lexlib Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue