Request for Tax Exemption of Donation of Medicines for Use in a Free Clinic in Isabela

August 5, 1986 BIR RULING NO. 145-86 169 296-82 145-86 Gentlemen : This refers to your letter dated July 3, 1986, stating that your client, the Sisters of Visitation of Japan represented by Sister Kiyo Suwa, its Philippine Superior, is a non-profit missionary congregation; that Sister Suwa is a religious volunteer working at a free clinic in the Archdiocese of Isabela; that in line with the clinic's urgent need for medicine, the Association of the Hospitals of Municipalities of Japan which is a non-profit association has committed to donate about 200 Kilograms of medicine for use in the free clinic that you now seek approval for tax exemption of the said goods considering the fact that the donation is purely for charitable purposes. In reply, please be informed that the medicine which you received as donation from abroad, particularly from Yoshimo Molohashi, chairman of the Association of Hospitals of Municipalities of Japan, even if intended for the use in the free clinic in Isabela is subject to the compensating tax at the rate of 10% of the total value used by the Bureau of Customs in determining tariff and customs duties, pursuant to Section 169(a) in relation to Section 165(A)(3)(g) both of the Tax Code as amended by P.D. No. 2031. It should be noted that said Section 169(b) enumerates the articles which are not subject to the compensating tax and those imported and/or donated from abroad to a religious organization like yours are not included in the enumeration. cdti Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner