Tax Exemption of Donation Made by Sweden's Index Braille to the Philippine Blind Union

April 6, 2000 BIR RULING NO. 022-00 b109 (q) 000-00 022-2000 Office of the President of the Philippines National Anti-Poverty Commission 3rd Floor PLJ Building 757 General Solano Street corner Espinosa Street, Malacaang San Miguel, Manila Attention: Mr . Ricardo A . Calapatia National President Gentlemen : This refers to your letter dated January 24, 2000 requesting for the exemption from the payment of the value-added tax the donated 1 package stc. Index Everest Braille Embosser covered by Invoice No. 9900707 dated December 21, 1999 with AWB No. 217 9127 6242 which came from Sweden and now at the warehouse in NAIA. cdlex It is represented that the Philippine Blind Union is the recognized and accredited National Federation for the blind in the Philippines; that the imported Braille Embosser is an equipment which prints Braille Books and periodicals for the use of blind students in their schools; that the said equipment was donated by the Index Braille of the Republic of Sweden and not to be used for commercial or business purposes; and that the UNESCO National Commission of the Philippines in letter dated January 6, 2000 has recommended tax and duty-free entry of the said Braille Embosser pursuant to the provisions of the UNESCO Florence Agreement. In reply, please be informed that pursuant to Section 109 (q) of the Tax Code of 1997, transactions which are exempt under international agreements to which the Philippines is a signatory or under special laws, except those under Presidential Decree Nos. 66, 529 and 1590, are exempt from the value-added tax. Republic Act No. 7277, otherwise known as the "Magna Carta for Disabled Persons" is a special law which grants tax incentives to foreign donor/s on donation, bequest, subsidy or financial aid made to government agencies engaged in the rehabilitation of disabled persons and organizations of disabled persons. Section 42 of the said Act provides as follows: "Section 42. Tax Incentives . (a) Any donation, bequest, subsidy or financial aid which may be made to government agencies engaged in the rehabilitation of disabled persons and organizations of disabled persons shall be exempt from the donor's tax subject to the provisions of Section 94 of the National Internal Revenue Code (NIRC), as amended and shall be allowed as deductions from the donor's gross income for purposes of computing the taxable income subject to the provisions of Section 29(h) of the Code. "(b) Donations from foreign countries shall be exempt from taxes and duties on importation subject to the provisions of Section 105 of the Tariff and Customs Code of the Philippines, as amended, Section 103 of the NIRC, as amended and other relevant laws and international agreements. xxx xxx xxx" Accordingly, the 1 package stc. Index Everest Braille Embosser donated by the Index Braille of the Republic of Sweden to the Philippine Blind Union is exempt from the donor's tax imposed under Section 99(A) of the Tax Code of 1997 and from the 10% VAT on importation imposed under Section 107(A) of the same 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, (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue