Books for the Barrios, Inc.

April 4, 2007 BIR RULING [DA-217-07] 101 (A) (3); DA-481-98 Books for the Barrios, Inc. 2350 D Whitman Road Concord CA Attention: Mr. Daniel Joseph Harrington Chair of the Board Gentlemen : This refers to your letter dated December 10, 2006 requesting exemption from the payment of taxes that may be imposed on the donation made by Books for the Barrios, Incorporated to different schools in the Philippines, such as: 1. Banago II Elementary School, Negros Occidental and 2. San Enrique Elementary School, Negros Occidental It is represented that Books for the Barrios, a California humanitarian public benefit corporation, has delivered each year an average of 300,000 kilos of selected schoolbooks and material resources to the most deprived, depressed underserved public schools throughout the Philippine archipelago with emphasis on those schools serving the children of Mindanao and the nation's indigenous peoples; that its volunteers, who are principally American schoolchildren, have provided the resources to establish over 10,000 public school libraries; that it conducted four National Teacher Training Conventions attended by 8,000 Dep Ed delegates; that additionally, the Dep Ed institutionalized its National "Model-of-Excellence Schools" Program which manages the long-term, development endowment of nearly three score of formerly severely-deprived elementary schools, transforming them into the world-class basic learning institutions; and that Books for the Barrios is recognized as the premier comprehensive Dep Ed development program in operation in the Philippines today. In reply, please be informed that inasmuch as the donees are educational institutions, the aforesaid donation is exempt from the payment of donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, subject to the condition that not more than 30% of said gift shall be used by the donees for administration purposes. Likewise, importation of books, films, slides and other educational materials and equipment such as computers to be actually, directly and exclusively used, for educational purposes shall be exempt from the value-added tax and customs duties, provided the guidelines under Department Order No. 137-87 in addition to the usual import requirements are observed (BIR Ruling No. DA-322-2004 dated June 11, 2004 citing BIR Ruling No. 248-88 dated June 6, 1988 and BIR Ruling No. 130-90 dated July 4, 1990). HCaIDS Moreover, the Deed of Donation executed for the purpose is not subject to the documentary stamp tax. However, the notarial acknowledgment on said deed is subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997. (BIR Ruling No. DA-481-98 dated November 9, 1998) Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service