Gifts Made in favor of a Non-stock and Non-profit Cultural Foundations are Exempt from Donor's Tax

September 10, 1991 BIR RULING NO. 178-91 Sec. 29 (h) (2) (C), 94 262-89 178-91 Gentlemen : This refers to your letter dated February 18, 1991 requesting for a ruling that all donations to the Foundation for the restoration of the famous botanical garden of Fr. Manuel Blanco at the San Agustin Compound are exempt from the donor's tax and that the same are deductible from the gross income of the donor. It is represented that Pamana Historical Foundation, Inc. is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission on March 6, 1990; that the purposes for which the corporation is forward are to engage in historical and cultural research, preservation of artifacts, establishments of libraries and museums, produce educational materials including but not limited to books, televisions, programs, motion pictures, exhibitions and to be involved in co-ventures for the location and retrieval of artifacts, such as archaeological burial sites, sunken historical vessels, anthropological work like folk dancing and art; that as a foundation for historical and cultural purposes it practically subsists on donations from concerned citizens, firms or corporations; that to pursue its purpose the foundation launched a campaign to raise funds by showing "Home Alone," which was premiered in February 22 at the San Agustin Theater in Dasmarias Village, and that no part of the funds of the foundation shall inure to the benefit of any individual or member. In reply, please be informed that gifts made in favor of a non-stock and non-profit cultural foundations within the contemplation of Sec. 94 (a) (3) of the Tax Code, as amended, are exempt from the donor's tax provided that no more than thirty per cent (30%) of said gifts shall be used by the donee for administration purposes. Considering that the donee, Pamana Historical Foundation, Inc., is a non-stock, non-profit cultural foundation, then the donations, contributions, or gifts made in its favor are exempt from the payment of the donor's tax likewise, the proceeds derived from the film showing "Home Alone" are exempt from income and business taxes. Pursuant to Section 29 (h) (1) of the Tax Code, as amended contributions or gifts actually paid or made within the taxable year to or for the use of domestic corporations or associations organized and operated exclusively for, among others, cultural or educational purposes, no part of the net income of which inures to the benefits of any private stockholder or individual are deductible for income tax purposes in an amount not in excess of 6% in case of an individual donor, and 3% in case of a corporate donor, of the donor's or contributor's taxable income derived from business as computed without the benefit of said deduction. aisadc Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge