BIR Ruling No. 106-84

June 18, 1984 BIR RULING NO. 106-84 30-h-058-83-106-84 Gentlemen : This refers to your letter dated May 10, 1984 requesting exemption from tax under Section 30(h) of the Tax Code, as amended of the donation in your favor by the Iwatsuki Rotary Club, Baitama Pref., Japan of two (2) pieces of used dental chairs which as represented, will be installed in your Charity Clinic for the benefit of the indigent public. Documentary evidence submitted show that the Rotary Club of Malabon (MM) Foundation, Inc. is registered with this Office as a qualified donee institution under Certificate of Registration No. 0417 dated November 23, 1981 in accordance with the provisions of BIR-NEDA Regulations No. 1-81. In reply, please be informed that since the Rotary Club of Malabon (MM) Foundation, Inc. is a registered donee institution, donations and/or contributions made in its favor are deductible in full for income tax purposes from the gross income of the donor-contributor pursuant to Section 30(h) of the Tax Code as amended by B.P. Blg. 45 and implemented by BIR-NEDA Regulations No. 1-81 as amended by Revenue Regulations No. 1-82 and 10-82. Nevertheless, inasmuch as the Iwatsuki Rotary Club of Japan, the donor in this case, is a non-resident organization, it shall not be entitled to any deduction from gross income derived in the Philippines, if any. Moreover, the aforesaid shipment or donation of two (2) pieces of used dental chairs for use in your Charity Clinic is subject to the compensating tax imposed under Section 204 of the Tax Code. It should be noted that this provision of law enumerates the articles which are not subject to compensating tax and those imported or donated from abroad to organizations, like the Rotary Club of Malabon (MM) Foundation, Inc. are not included in the enumeration. Be that as it may, pursuant to Section 123(b)(2) of the Tax Code, as amended, donation to a social welfare corporation, like the Rotary Club of Malabon (MM) Foundation, Inc. is exempt from the donor's tax provided that not more than thirty per centum (30%) of said gifts shall be used by the donee for administration purposes. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner