Tax Notes

Full deductibility of donations against taxable income

ON APRIL 6, 2020, the Bureau of Internal Revenue (BIR) released Revenue Regulations (RR) 9-2020, granting further benefits from donations during the Enhanced Community Quarantine (ECQ) in relation to the National Internal Revenue Code (NIRC) of 1997, as amended. RR 9-2020 provides that donations or gifts made for the sole and exclusive purpose of combating Covid-19 during the state of national emergency shall be exempt from donor’s tax and shall be considered fully deductible against the gross income of the donor-corporation or donor-individual, granted that documentary evidence of such is provided. Such donations are limited to cash donations; donations of all critical or needed health care equipment or supplies; relief goods such as, but not limited to food packs (rice, canned goods, noodles, etc.) and water; and use of property, whether real or personal (shuttle service, use of lots or buildings).

Below are the documentary requirements for the donee-recipient and the donor:

For donors donating to a donee-recipient, as enumerated under Sections 34(H), in relation to Section 101 of the NIRC of 1997, as provided under Section 3 of RR 9-2020 (table 1)

For donors donating to other donee-recipients, as provided under Section 6 in relation to Section 4 of RR 9-2020 (table 2)

The documentary requirements shall be submitted to the Revenue District Office where the donor and donee-recipient are registered within 60 days from the lifting of the ECQ.


Source:

P&A Grant Thornton

Certified Public Accountants

 

As published in SunStar Cebu, dated 21 April 2020