Proceeds from Musical Show Subject to 25%-35% Normal Corporate Income Tax; Subsequent Donation Exempt from Donor's Gift Tax

July 16, 1981 BIR RULING NO. 108-81 30 (h) 000-00 108-81 Ateneo de Manila University Graduate School of Business P.O. Box 154, Manila Attention: Mr . Alejandro C . Beltran, Jr . Executive Producer Gentlemen : This refers to your letter dated April 20, 1981 stating that on June 28, 1981, you will present a musical show entitled "Music For All Seasons" at the Philamlife Auditorium, the entire proceeds from which shall be donated to the St. Joseph of Cupertino School, a non-stock, non-profit foundation for retarded persons deriving income from service fees, tuition fees, donations from civic-spirited individuals and establishment and benefit programs and fund raising projects. You now seek the exemption from tax of the proceeds that would be generated by the abovesaid musical show. In reply, please be informed that the entire proceeds that you would be able to raise from the musical show, being neither income from school operations, related school activities nor passive investment income, shall be subject to the 25%-35% normal corporate income tax. However, since the said proceeds are to be donated subsequently to the St. Joseph of Cupertino School, the same shall be exempt from donor's gift tax under Section 123 of the Tax Code, as amended and shall be deductible in full from your gross income provided that the St. Joseph of Cupertino School applies for registration by filing with the Government and Exempt Corporation Division of this Office a sworn statement or affidavit showing (a) the character of the organization; (b) the purpose/s for which it is organized; (c) its actual activities; (d) the lists of its proposed projects; (e) the sources of its income and the disposition thereof, (f) other facts relating to its donations which are relevant to its qualifications as a donee institution. Said donee institution should also submit a copy of its articles of incorporation, by-laws and a financial statement showing its assets, liabilities, receipts and disbursements. (Section 5 BIR-NEDA Regulations No. 1-81). Very truly yours, RUBEN B. ANCHETA Acting Commissioner