BIR Ruling

August 30, 1976 Donations to Social Club Not Deductible from Gross Income of Donor This refers to your request in behalf of your client, the Philippine Association, for a ruling on whether donations to your client-association are fully deductible from the gross income of the donors under Presidential Decree No. 507. In reply, I have the honor to inform you that your client is not qualified to avail of the benefits of Presidential Decree No. 507 for the reason that according to the investigation conducted by this Office, your client is a social club. Under said Decree, only social welfare, cultural or charitable institutions as defined in Section 3(a)(b)(c) of Revenue Regulations No. 8-74, implementing the Decree, are qualified to avail of the benefits prescribed therein one of which is that donations to said institutions are 100% deductible from the gross income of the donor. In view thereof, your query is answered in the negative. However, in order that Association 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 and bequest received during the year, which should show the name and address of the donor 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). cdtech