Whether Donations in Favor of Basic Technical Institute and Foundation, Inc., Which Was Granted Exemption from the Donor's Tax and Value-Added Tax on Importation of Machineries and Equipment in Furtherance of Its Objective as a Non-Stock, Non-Profit Educational Institution, Will be Deductible from the Income of the Donor

February 27, 1991 BIR RULING NO. 037-91 29 (h) (1) 091-90 037-91 S i r : This refers to your letter dated November 21, 1990 stating that your client, Basic Technical Institute and Foundation, Inc. was granted exemption from the donor's tax and value-added tax on importation of machineries and equipment in furtherance of its objective as a non-stock, non-profit educational institution. Based on the foregoing representation, you now in effect request a ruling as to whether or not whatever amount donated in favor of your said client will be deductible from the income of the donor. In reply, please be informed that under Section 29 (h) (1) of the Tax Code, as amended, contributions or gifts actually paid or made within the taxable year to or for the use of domestic corporations or associations organized and operated exclusively for, among others, cultural or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual is deductible in an amount not in excess of 6% in 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 benefits of the said deduction and that provided in subparagraph (2) of the same Section. Such being the case, and since donations made in favor of the Basic Technical Institute and Foundation, Inc., are exempt from the donor's tax under Section 94 of the Tax Code, as amended, any or whatever amount of donation in its favor is therefore deductible for income tax purposes in an amount not in excess of 6% in the case of an individual donor, and 3% in the case of a corporate donor, of the donor's taxable income derived from business as computed without the benefit of said deduction. cdti Very truly yours, (SGD.) JOSE U. ONG Commissioner