Donation to the Government of a Portion of Land in Novaliches to Benefit Occupant Families is Deductible from the Gross Income of the Donor-Landowner

December 9, 1987 BIR RULING NO. 393-87 30 (h) 000-00 393-87 S i r : This refers to your letter dated November 19, 1987 requesting in effect, a ruling as to whether the donation to the Government of a portion of land in Novaliches to benefit 21 occupant families is deductible from the gross income of the donor-landowner, G.B. Francisco, Inc. In reply, please be informed in the affirmative. Pursuant to Section 30(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 the Government of the Philippines or any of its agencies or any political subdivision thereof for exclusively public purposes shall be deductible from the gross income of the donor, like G.B. Francisco, Inc. in this case to the extent of 3% of the taxpayer's taxable income derived from business as computed without the benefit of this and other deductions. However, under Section 30(h)(2)(a) of the same Code, this particular donation may be deductible in full if the same is granted in favor of a government agency or fully-owned government corporation exclusively to finance, to provide for, or to be used in undertaking priority activities in human settlements, among others, 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, provided that any donation which is made to the Government or to any of its agencies or political subdivisions not in accordance with the said annual priority plan shall be subject to the aforesaid limitation of 3% prescribed in Section 30(h)(1) of the Tax Code. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner