Donations to the National Museum, the National Library and the Archives of the National Historical Institute

February 20, 1990 BIR RULING NO. 019-90 29 (b) 000-00 019-90 Gentlemen : This refers to your letter dated November 14, 1989, in effect, requesting a ruling as to whether donations to the National Museum, the National Library and the Archives of the National Historical Institute are still tax-exempt and deductible from the taxable gross income of the donor, pursuant to P.D. No. 373 issued on January 9, 1974. It appears that said donations will be utilized in producing shows/movies on the lives of our National heroes. aisa dc In reply, please be informed that the tax-exemptions and incentives under P.D. No. 373 are no longer in force. Under Executive Order No. 93, effective March 10, 1987, all tax and duty incentives granted to government and private entities had been withdrawn, except those conferred, among others, under the National Internal Revenue Code. Thus, under Sections 94(a)(2) of the Tax Code, as amended, pertinent portions of which is quoted as follows: "Sec. 94. Exemption of Certain Gifts . The following gifts shall be exempt from the tax provided for in this chapter: "(a) In the case of gifts made by a resident: 'xxx xxx xxx "(2) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government." the above donations are exempt from the donor's tax if made to or for the use of the National Government or such entities as the National Museum, the National Library, and the Archives of the National Historical Institute which are conducted for profit. As regards the deductibility of the said donations for income tax purposes, under Section 29(h)(2)(A) of the Tax Code the same are deductible in full if they are given to the Government to be used exclusively to finance, to provide for or to be used in undertaking priority activities, one of which is for cultural development as described in the National priority plan proposed by the NEDA. (Sec. 3.B, BIR-NEDA Regulations No. 1-81) Undoubtedly, the production of shows depicting the lives of our National heroes is a cultural activity; hence, the fund utilized for this purpose may be considered used to undertake said activities. Such being the case, the above donations to be utilized for said purpose are deductible in full for income tax purposes if they are covered by the national priority plan of the NEDA. If the donations are not in accordance with said plan, the same are deductible in an amount not in excess of 6% in the case of an individual, and 3% in the case of a corporation of the taxpayer's taxable income derived from business as computed without the benefit of this deduction pursuant to Section 29(h)(1) of the Tax Code. cdtech Very truly yours, (SGD.) JOSE U. ONG Commissioner