BIR Ruling No. 170-84

November 5, 1984 BIR RULING NO. 170-84 30 (h)-000-00-170-84 S i r : This refers to your letter dated October 18, 1984 requesting a ruling as to whether the donations from private firms, individuals and/or business sectors in favor of the Inter-Department (Ministry) Employees Athletic League (IDEAL) in connection with its proposed First Amateur Basketball Invitational (FABI) project are deductible from the gross income of the said donors. In reply, please be informed that, pursuant to Section 30(h) of the Tax Code of 1977 as amended by Batas Pambansa Blg. 45, to be fully deductible, a donation to the Government of the Philippines or to any of its agencies should be exclusively to finance, to provide for or to be used in undertaking priority activities in education, health, youth and sports development, human settlements, science and culture, and in economic development according to a national priority plan to be determined by the NEDA, in consultation with appropriate government agencies, including its regional development councils, and private philanthropic persons and institutions. Considering that IDEAL is not a government agency strictly speaking, and considering further that it has not been shown that the donations to be made to IDEAL are to be utilized in accordance with a national priority plan prepared by NEDA, donations given to IDEAL would not qualify for full deduction under the aforesaid provision of the Tax Code. However, under the general provisions of the same Section 30(h) of the Tax Code, IDEAL would qualify as a bona fide association organized and operated exclusively for sports development, no part of the net income of which inures to the benefit of any private stockholder or individual. Thus, donations given to IDEAL are deductible for income tax purposes, but only to the extent of 6% in the case of an individual donor, and 3% in the case of a corporate donor, of the donor's taxable net income as computed without the benefit of said donation. iatdc Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner