BIR Ruling [DA-291-04]

May 27, 2004 BIR RULING [DA-291-04] 34 (H) (2) (b); DA-371-2003 Cultural Center of the Philippines Sentrong Pangkultura ng Pilipinas Roxas Boulevard, Pasay City 1300 Attention: Mr. Rodolfo G. Del Rosario OIC-Office of the Vice-President for Resource Services Gentlemen : This refers to your letter dated March 3, 2004 requesting for a ruling on whether donations to the Cultural Center of the Philippines ("CCP" for brevity) can be treated as full deductible expense on the part of the donors in accordance with Sec. 34 (H) of the 1997 Tax Code. It is represented that CCP is a non-municipal public corporation created under the law by virtue of Presidential Decree (P.D.) 15, as amended by P.D. No. 1825, making it a Government Cultural Organization. In reply, please be informed that under Section 34 (H) (2) (a) of the Tax Code of 1997, which provides, to wit: "(2) Contributions Deductible in Full. Notwithstanding the provisions of the preceding subparagraph, donations to the following institutions or entities shall be deductible in full: (a) Donations to the Government. Donations to the Government of the Philippines or to any of its agencies or political subdivisions, including fully-owned government corporations, exclusively to finance, to provide for, or to be used in undertaking priority activities in education, health, youth and sports development, human settlements, science and culture, and in economic development according to a National Priority Plan determined by the National Economic and Development Authority (NEDA), in consultation with appropriate government agencies, including its regional development councils and private philanthropic persons and institutions: Provided, That any donation which is made to the Government or to any of its agencies or political subdivisions not in accordance with the said annual priority plan shall be subject to the limitations prescribed in paragraph (1) of this Subsection;" ADCEcI (Emphasis supplied) donations made to the Government of the Philippines or to any of its agencies or political subdivisions are deductible in full. CCP is a non-municipal public corporation duly created under P.D. No. 15, as amended by P.D. No. 1825, for purposes of implementing more effectively and vigorously the constitutional injunction that arts and letters shall be under the patronage of the state. Accordingly, donations made to CCP shall be considered as donations made to the Government and is deductible in full on the part of the donor. The foregoing being considered, this Office opines that donations to the Cultural Center of the Philippines ("CCP" for brevity) can be treated as full deductible expense on the part of the donors in accordance with Sec. 34 (H) (2) (a) of the 1997 Tax Code. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service