BIR Streamlines Tax Incentives for Education Programs

The Bureau of Internal Revenue (BIR) issued Revenue Regulation 13-2025 to simplify the process in availing tax incentives under the Adopt-a-School Act of 1998 (Republic Act No. 8525) last 31 March 2025. The regulation provides clearer guidelines on the availment of tax incentives for private entities that support education through donation, partnerships and training with public institutions.

Under RR 13-2025, a private entity that enters into an agreement with a public school to provide assistance, support, or donation (referred to as an Adopting Private Entity) may be entitled to the following tax incentives:

• An additional deduction of 150% from gross income of the amount of donation or contribution, provided it is, actually, directly and exclusively incurred in the program;
• Exemption from donor’s tax;
• For foreign donations, any VAT or excise tax shall be shouldered by the appropriate government agency (i.e., the Department of Education, Commission on Higher Education or Technical Education and Skills Development Authority); and
• For local donations considered as a “transaction deemed sale” shall be subject to VAT. Otherwise, such donations are not subject to VAT.

These tax incentives are granted in addition to the regular allowable business expense deductions allowed under the National Internal Revenue Code (NIRC), as amended. 

To avail of the incentives, the taxpayer must attach the original or certified true copies of the following documents to the Donor’s Tax Return and Income Tax Return:

1. A duly notarized agreement between the Adopting Private Entity and the public school,
2. A duly notarized Deed of Donation and Acceptance,
3. A Sworn Declaration issued by the authorized officer of the Adopting Private Entity as to the direct connection or the relation of the expenses being claimed as deduction/donation.

Additionally, the Adopting Private Entity must retain the corresponding official invoices and other supporting documents for purposes of BIR post-audit.

The regulation offers a clearer and more straightforward process for private entities to claim tax benefits tied to their contributions. This can lead to more consistent support for public schools and learning institutions, enabling them to access resources, upgrade facilities, and offer enhanced learning opportunities.

Please be guided accordingly.

Source: 

P&A Grant Thornton 

Certified Public Accountants 

P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.

As published in SunStar Cebu, 09 July 2025