RR 13-1998
RR 13-1998
SUBJECT : Implementing Republic Act No. 8424, "An Act Amending the
National Internal Revenue Code, as amended" Specifically
Section 34 (H) Relative to the Deductibility of Contributions
or Gifts Actually Paid or Made to Accredited Donee
Institutions in Computing Taxable Income
(i) religious;
(ii) charitable;
(iii) scientific;
(iv) athletic;
(v) cultural;
no part of the net income or asset of which shall belong to or inure to the benefit of
any member, organizer, officer or any specific person.
(i) Which, not later than the fifteenth (15th) day of the third month
after the close of the NGO's taxable year in which contributions are
received, makes utilization directly for the active conduct of the
activities constituting the purpose or function for which it is
organized and operated, unless an extended period is granted by the
Secretary of Finance, upon recommendation of the Commissioner;
(ii) Any amount paid to acquire an asset used, or held for use, directly
in carrying out one or more purposes for which the accredited
NGO was created or organized; or
(iii) Any amount set aside for a specific project which comes within
one or more purpose or purposes for which the accredited NGO
was created, but only if at the time such amount is set aside, the
accredited NGO has established to the satisfaction of the
Commissioner of Internal Revenue that the amount will be utilized
for a specific project within a period not to exceed five (5) years,
and the project is the one which can be better accomplished by
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setting aside such amount than by immediate payments of funds:
Provided, That, the utilization requirements prescribed under Sec.
5 of these Regulations shall be complied with; or
(h) "Character building and youth and sports development (or athletic)
purposes" — shall refer to and include conducting basic and applied research on
youth development, initiating and establishing youth organizations to promote and
develop youth activities, including the establishment of summer camps or centers for
leadership training, conducting a program on physical fitness and amateur sports
development for the country; developing and maintaining recreational facilities,
playgrounds and sports centers; and conducting training programs for the
development of youth and athletes for national and international competitions. cdll
(iii) providing for the rehabilitation of the youth and disabled adults,
released prisoners, drug addicts, alcoholics, mentally retarded,
hansenites and similar cases; and
(m) "Health purposes" — shall refer to include the pursuit of any of the
following:
(iv) Duly audited financial statements for the past two (2) years
showing the assets, liabilities, receipts and disbursements of
existing organizations, or financial projections for the first two (2)
years for newly-organized non-stock, non-profit
corporations/NGOs. prLL
(ii) Resources
1. Organizational plan
2. Monitoring and evaluation tools
(g) The Accrediting Entity shall deny the applications of any non-stock,
non-profit corporation/NGO which does not meet the criteria for accreditation. The
Private Accrediting Entity shall notify the non-stock, non-profit corporation/NGO of
the denial of the application, the reasons therefor, and the evaluators' recommendation
in order that the non-stock, non-profit corporation/NGO may meet the criteria for
accreditation. A non-stock, non-profit corporation/NGO whose application for
accreditation has been denied by the Private Accrediting Entity shall have one (1) year
within which to implement the evaluator's recommendations. After the one-year
implementation period, the non-stock, non-profit corporation/NGO may re-apply for
accreditation.
(h) The Secretary of Finance and the Commissioner of Internal Revenue shall
oversee, monitor and coordinate with the Accrediting Entity to ensure that the
provisions of these Regulations are complied with.
(3) Exemption from Donor' s Tax — Donations and gifts made in favor
of accredited non-stock, non-profit corporations/NGOs shall be
exempt from donor's tax:Provided, however, That not more than
thirty percent (30%) of the said donations and gifts for the taxable
The application for the Commissioner's prior approval must contain the
following:
(a) the nature and purpose of the specific project and the amount
programmed therefor;
Amounts set aside shall be evidenced by book entries and documents showing
evidence of deposits or investments, including of the funds so set aside, or other
documents that the Commissioner may require. llcd
(a) Time of Filing. — Claims for limited or full deductibility of donations and
contributions by the donors shall be filed by the donors at the time of filing their
income tax returns.
(b) Place of Filing. — The income tax return and/or the annual information
return of the donor or of the accredited non-stock, non-profit corporation/NGO shall
be filed in the Revenue District Office where the place of business of the donor or the
donee, as the case may be, is located.
On the other hand, donors claiming exemption from donor's tax on their
donations and contributions to accredited non-stock, non-profit corporations/NGOs
should submit evidences or proofs showing the amount of donation, if in cash; if real
property, the zonal value thereof at the time of donation; and if personal property, the
acquisition cost thereof, but if said personal property had already been used at the time
of donation, the depreciated or book value thereof.
(i) A list of the donations and income received during the year,
showing the name and address of the donors; the sources of
income; the amount or market value of each donation and items of
income and the disposition thereof;
(iii) A list of projects, their corresponding costs; the amount "set aside"
and the status of funds balances at the end of the year;
(b) Purchasing any security and/or property for more than an adequate
consideration in money or money's worth;
(c) Selling any part of the security or other property for less than
adequate consideration in money or money's worth;
(e) Using any part of its property, income or seed capital for any
purpose other than that for which the corporation was created or
organized; or
(a) The Accrediting Entity shall have the authority to withdraw the Certificate
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of Accreditation which it issued to a non-stock, non-profit corporation/NGO upon a
determination that the latter no longer meets the criteria for accreditation under Sec. 2
(c) of these Regulations. The Private Accrediting Entity concerned shall inform the
Legal Service of the National Office or the concerned division of the Regional Offices
of the withdrawal of the Certificate of Accreditation and recommend to the BIR the
revocation of the Certificate of Registration of the non-stock, non-profit
corporation/NGO concerned.
(b) The Accrediting Entity which issued the Certificate of Accreditation shall
report to the Legal Service of the National Office or to the concerned division of the
Regional Offices any violation of any provision of these Regulations by the accredited
non-stock, non-profit corporation/NGO. Violation of any provision of these
Regulations shall constitute a ground for the withdrawal by the Private Accrediting
Entity concerned of the Certificate of Accreditation and the revocation by the BIR of
the Certificate of Registration.
Recommending Approval: