BIR Ruling [DA-141-05]

April 11, 2005 BIR RULING [DA-141-05] Section 34 (H) (2) (a) BIR Ruling No. DA-086-05 Cordova & Associates 2801, 28/F, Ayala Life-FGU Center 6811 Ayala Avenue Makati City Attention: Atty. Ebenezer D. Cordova Gentlemen : This refers to your letter dated March 16, 2005 requesting, on behalf of your client, Aboitiz Projects T.S. Corporation (Aboitiz), with address at Makati City, a ruling that Aboitiz can avail of the full deductibility as provided under Section 34(H) of the Tax Code of 1997 on its donation to the Municipality of Barotac Nuevo, Ilo-ilo, a local government unit. In reply, please be informed that Section 101(A)(2) of the Tax Code of 1997 should be read in relation to Section 34(H) of the same Code which allows full deductibility from the gross income of the donor in respect to donations to the Government. However, any donation which is made to the Government or any of its agencies or political subdivisions not in accordance with the National Priority Plan as determined by the National Economic and Development Authority (NEDA) shall be subject to limited deductibility of ten percent (10%) in case of an individual's, and five percent (5%) in case of a corporation's taxable income. In view of the foregoing, the donation by Aboitiz to the Municipality of Barotac Nuevo, Ilo-ilo is deductible in full from the gross income of Aboitiz. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. ASEcHI Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group