Compliance with the Substantiation Requirements in Claiming Charitable Contributions as Deductions from Gross Income of Donee

July 18, 1991 BIR RULING NO. 139-91 29 (h) 000-00 139-91 Gentlemen : This refers to your letter dated November 15, 1990 requesting confirmation of your opinion that the enclosed certifications/letters issued by the donees of your client, Texas Instruments (Phils.) Inc. (TIPI) are in substantial compliance with the substantiation requirements in claiming charitable contributions as deductions from gross income of TIPI under Section 29 (h) of the Tax Code, as amended. cdta It is represented that after July 16, 1990 earthquake, TIPI undertook a community development/rehabilitation program wherein it extended free medical and central services and at the same time donated various medical supplies to the Export Processing Zone Authority of Baguio (EPZA) and several barangays greatly affected by the devastating earthquakes; that consequently, the donees issued certifications and letters, copies of which are attached hereto, acknowledging receipt of the donations; that the certifications/letters basically provide to the following information: (a) date of the donation; (b) acknowledgment of the actual receipt of the donation; (c) quantity and description of the property donated; (d) name of the donor; (e) name of the donee; and that TIPI intends to use the aforementioned certificates/letters as documentary evidence to substantiate its claim for deductions from gross income under Section 29 (h) of the Tax Code, as amended. In reply thereto, I have the honor to inform you that pursuant to Sections 7 and 11 of BIR-NEDA Regulations No. 1-21 as amended by BIR-NEDA Regulations No. 1-82 and 10-82 implementing Section 29 (h) of the Tax Code, as amended, donors should give notice for every donation worth over P1,000.00 to the Commissioner of Internal Revenue within 30 days after the receipt of the Certificate of Donation attaching thereto copy of the Certificate of Donation issued to him by the qualified donee institution. Moreover, donors claiming deduction from their taxable income for donations authorized by Batas Pambansa Blg. 45 should submit evidence to the BIR showing submission of the Certificate of Donation and/or Notice of Donation: (a) actual receipt by the donee of the donation and the date of receipt thereof; and (b) the amount of the donation, if in cash; if real property, the value thereof at the time of donation, which shall be based on the assessor's most recent valuation and if personal property, the acquisition cost thereof, but if said personal property had already been used at the time of the donation, the depreciated or back value thereof. You stated that although the attached certifications/letters fail to state the value of the property donated, nevertheless the value of the medicines and medical supplies donated can easily be established from official receipt issued by the drug store/companies and other supporting papers. Such being the case, although the enclosed certifications/letters issued by the different barangays and EPZA acknowledging their receipt of earthquake donations failed to state the value of the properties donated, nevertheless since the value of the medicines and medical supplies can be established from official receipts issued by the drug store/or companies and other supporting papers the same are sufficient to substantiate TIPI's claim for deduction on charitable contributions under Section 29 (h) of the Tax Code, as amended and implemented by BIR-NEDA Regulations No. 1-81 as amended by BIR-NEDA Regulations No. 1-82 and 10-82. cdti Very truly yours, (SGD.) JOSE U. ONG Commissioner