BIR Ruling [DA-034-03]

February 5, 2003 BIR RULING [DA-034-03] RR 13-98 Philippine Council for NGO Certification 6/F SCC Building, CFA-MA Compound 4427 Interior Old Sta. Mesa Road Sta. Mesa 1016 Manila, Philippines Attention: Ms. Fely I. Soledad Executive Director Gentlemen : This refers to your letter dated December 9, 2002 requesting for a ruling in behalf of Defending Family Values Foundation and Mirant-Phils. Foundation, Inc.,relative to their status as donee institution. It is represented that the Memorandum of Agreement signed in January 1998 between the DOF-BIR and PCNC and Revenue Regulations No. 13-98 issued on December 8, 1998 stipulate that of the tax exempt entities enumerated in Section 30 of the Tax Code, those listed in RR 13-98, Section 1 a & b, should be certified by PCNC as donee institutions, to enable their donors to deduct their donations from their taxable income; that as of December 9, you have evaluated 350 organizations, out of which 81 have been certified for 5 years, 110 certified for 3 years, 47 certified for 1 year, 40 have deferred certification, 44 were not certified and 27 still have to be deliberated on; that there are more organizations scheduled for evaluation visits and among these are those applying for renewal of their donee status; that these organizations have already been certified but their certification life has lapsed and therefore have to be evaluated again; that they have completed their application process, but due to the number of applicants that you have visited this year, you can only schedule them for evaluation in the first quarter of the year 2003; that the Certificate of Accreditation of Defending Family Values Foundation and Mirant-Phils. Foundation, Inc. expired January 10, 2003 and October 14, 2002 respectively; and that you are requesting that they be given a grace period until April 2003 during which period they can still accept deductible donations from their donors as this support from their benefactors will certainly help sustain their programs and projects. In reply, please be informed that Section 11(a) of Revenue Regulations No. 13-98 provides that the Accrediting Entity shall have the authority to withdraw the Certificate of Accreditation which it issued to a non-stock, non-profit corporation/NGO upon a determination that the latter no longer meets the criteria for accreditation under Section 2(c) of the said regulations and shall inform the Legal Service of the National Office or the concerned division of the Regional Offices of the withdrawal of the Certificate of Accreditation and recommend to the BIR the revocation of the Certificate of Registration of the non-stock, non-profit corporation/NGO concerned. To date no notice of withdrawal of the Certificate of Accreditation nor recommendation of the revocation of the Certificate of Registration of the subject NGO's has been communicated to this Office and as represented, these organizations have already been certified but their certification life has lapsed and therefore have to be evaluated again. They have completed their application process, but due to the number of applicants that PCNC have visited this year, PCNC can only schedule them for evaluation in the first quarter of the year 2003. Inasmuch as the aforesaid NGO's faithfully, complied with the requirements for accreditation but the accrediting entity, due to the number of applicants, can not, in the meantime, evaluate their application, and is in fact requesting for a grace period until April 2003 in their behalf, this Office hereby grants the said request for grace period, until April 2003, to enable their donors to deduct their donations from their taxable income, provided that Defending Family Values Foundation and Mirant-Phils. Foundation, Inc., have not committed any of the prohibited transactions provided for under Section 10 of Revenue Regulations No. 13-98 nor have deviated from the purposes for which they have been organized and which became the basis of their previous accreditation. DTEAHI This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it shall be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service