Charity First Foundation, Inc.

May 2, 2008 BIR RULING [DA-276-08] Section 30; BIR Ruling No. S-30-047-2006 Charity First Foundation, Inc. 84 Doa Hemady St., New Manila Quezon City Attention: Mr. Richard So President Gentlemen : This refers to your letter dated April 17, 2008, requesting a ruling to the effect that donations received by your institution are exempt from donor's tax and that the same are deductible expense of the donor pursuant to Section 101 (A) (3) and Section 34 (H) (2) (C) both of the Tax Code of 1997, respectively. It is represented that CHARITY FIRST FOUNDATION, INC.,(CHARITY FIRST, for short) is a non-stock, non-profit, non-governmental organization (NGO) established in 2001 to help the marginalized sectors of our society; that primarily, you provide scholarship grants to poor but deserving college students in Metro Manila, free medical and dental services, livelihood program to the residents of Payatas, Quezon City and Bagong Silang, Caloocan City; and that you also have an environmental advocacy; Hence, your request. In reply, please be informed that inasmuch as CHARITY FIRST is a social welfare institution, donations to it are 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 thirty percent (30%) of said gift shall be used for administration purposes. Likewise, Section 34 (H) (2) (C) of the Tax Code of 1997 provides that donations to an accredited non-government organization (NGO), which means a non-profit domestic corporation or association organized and operated exclusively for scientific, research, educational, character building and youth and sports development, health, social welfare, cultural or charitable purposes or a combination thereof, no part of the net income of which inures to the benefit of any private individual shall be deductible in full from the taxable business income of the donor depending on the donee's compliance with the level of administrative expense and utilization requirements. In case of failure on the part of the accredited NGO to comply with the level of administrative expense and utilization requirements, its donors shall be entitled only to the limited deductions (in an amount not in excess of 10% in the case of an individual, and 5% in the case of a corporation, of the donor's taxable income derived from trade, business or profession as computed without the benefit of Section 34 (H) of the Tax Code of 1997, as provided for under Section 34 (H) (1) of the same Tax Code. ScTIAH Donations, contributions or gifts actually paid or made within the taxable year to an accredited NGO shall be allowed full deductibility on the taxable year it was incurred pursuant to Section 34 (H) (2) (C) of the Tax Code of 1997 (BIR Ruling No. DA-124-2004, April 20, 2004 and BIR Ruling No. S30-016-2004 dated May 6, 2004). 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. HECTaA Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service