Request for Tax Incentives or Exemption of Would-be-Donors and or Financiers

September 8, 1992 BIR RULING NO. 248-92 94 (a) (3) (b) (2) 076-92 248-92 Philippine Dextran Development Foundation, Inc. Room 500 Campus Rueda Building Urban Avenue, Makati Metro Manila Attention: Mr . Benjamin G . Nolasco Foundation Member and Patent Holder Gentlemen : This refers to your letter dated June 4, 1992 stating that you are a non-stock, non-profit organization duly registered with the Securities and Exchange Commission (SEC) on December 14, 1983 and is a Department of Science and Technology (DOST) accredited science foundation; that you have projected plans of producing a gum (polysaccharide) substance utilizing our indigenous raw materials and technology; that you need financial assistance or grant-in-paid including equipment necessary for the operation of your pilot project; hence, you now request for tax incentives or exemption of your would-be-donors and or financiers who could assist you to realize your projects. In reply, please be informed that pursuant to Section 94(a)(3) and (b)(2) of the Tax Code, as amended, gifts or donations in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, trust or philanthropic organization or research institution or organization are exempt from donor's tax provided, however, that not more than thirty per centum of said gifts shall be used by such donee for administration purposes. Accordingly, since the donee (you) in the instant case is a scientific organization, the aforesaid donations are exempt from the payment of donor's tax pursuant to Section 94(a)(3) of the Tax Code, as amended, subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. However, if the donated equipment will come from abroad, the importation thereof shall be subject to 10% VAT based on the total value used by the Bureau of Customs in determining tariff and customs duties, excise tax, if any and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody pursuant to Section 101 (3) of the Tax Code, as amended by E.O. No. 273. aisadc Very truly yours, JOSE U. ONG Commissioner of Internal Revenue