8088 2010 BIR - Ruling - No. - 103 1020210505 12 Mijt7d

October 12, 2010
BIR RULING NO. 103-10
Sec. 34 (H); Sec. 101
Child Protection Unit Network Organization, Inc.

Tropicana Apartment Hotel
1630 Guerrero St.
Malate, Manila
Attention: Dr. Bernadette J. Madrid, MD

Executive Director
Ms. Amelia R. Fernandez
Board Secretary & Treasurer
Gentlemen :
This refers to your request on behalf of Child Protection Unit Network

Organization, Inc. ("CPU Net" for brevity) for a ruling that donations made to
it for the 7th International Society for the Prevention of Child Abuse and
Neglect (ISPCAN) Asian Regional Conference are exempt from donor's tax
and are deductible expenses in accordance with Sections 34 (H) and 101 (A)
(3) of the National Internal Revenue Code of 1997, as amended. IASEca
As represented, CPU Net is a non-stock, non-profit association

registered with the Securities and Exchange Commission (SEC) under SEC
Registration No. CN200300718 dated January 9, 2003. The purposes for
which it was organized are as follows:
"1. To provide support, training and resources to enable child
protection practitioners and child protection units to achieve
excellence in serving abused children and children-at-risk;
2. To be able to give and receive funding for the purposes of
supporting child protection practitioners, child protection units and
the child protection system as a whole;
3. To initiate, stimulate, support and conduct activities that will
enhance attainment of the corporation's interests, goals and
objectives;
4. To do each and everything necessary, suitable and proper at

any time or place for the accomplishment of any purpose, or
attainment of any or more of the objectives herein enumerated; and
to exercise and possess all powers, rights and privileges necessary or
incidental to purposes for which the corporation was organized or to
the activities on which it is engaged, including the right to sue and
enforce contracts, and in general, to exercise all powers, rights and
prerogatives as may be granted or allowed by law or hereafter to the
corporation organized under the laws of the Philippines."
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It is composed of physicians and child protection units from all over the
Philippines dedicated to educating multi-disciplinary professionals such as
physicians, social workers, lawyers, police and the judiciary in the integrated
management of abused and neglected children. As part of its professional
education thrust, CPU Net will host the 7th ISPCAN Asian Regional
Conference to be held at the Hotel Philippine Plaza from September 23 to 26,
2007 entitled "AKO PARA SA BATA" (I am for the Child).
This is a biennial Asian conference which will be held for the first time
in the Philippines with delegates from various professional, governmental
and non-governmental organizations of different countries throughout Asia,
Europe, Australia and America to discuss the following issues:
• Child physical and sexual abuse
• Children in conflict with the law
• Children in natural disasters
• Child sex tourism and trafficking EAHDac
CPU Net has prepared simultaneous symposia and workshops that

would benefit the different disciplines needed in addressing the above child
abuse and neglect issues. Speakers from the Philippines as well as other
Asian countries, the US, Europe and Australia will share their expertise and
experiences on what works and what can be applied in different cultural
settings. Moreover, it has tapped the ISPCAN executive councilors, the US
Office of Juvenile Justice and Delinquency Prevention (OJJDP), Child Rights
Education for Professionals (Cred-Pro), ECPAT and the Philippine Judicial
Academy (PHILJA), among others, to conduct workshops for specific
disciplines. The Department of Social Welfare and Development (DSWD) is a
major partner of CPU-Net in the Conference.
CPU Net has solicited various donations from persons, corporations and
organizations, here and abroad, who have given the aggregate amount of
Four Million Six Hundred Forty Thousand Pesos (PhP4,640,000) all of which
are intended to defray the expenses that will be incurred before and during
the Conference. Most of the expenses involve sponsorship of invited
international speakers and registration and support of Asian and local
participants. CPU Net expects that Six Million Five Hundred Thousand Pesos
(PhP6,500,000) more will be needed to fully cover these expenses.
CPU Net is currently in the process of securing its accreditation with
the Philippine Council for NGO Certification, Inc. (PCNC).
In reply, please be informed that gifts in favor of an educational and/or
charitable, religious, cultural or social welfare corporation, institution,
accredited nongovernment organization, trust or philanthropic organization
or research institution or organization is exempt from the payment of the
donor's tax pursuant to Section 101 (A) (3) and (B) (2) of the Tax Code of
1997, subject to the condition that not more than 30% of said gift shall be
used by the donee for administration purposes.
On the issue of deductibility of donations from the gross income of the
respective donors, Section 34 (H) (2) (C) of the Tax Code of 1997 provides
that donations to an accredited non-government organization (NGO), which
means a non-profit domestic corporation or association organized and
operated exclusively for scientific, research, educational, character building
and youth and sports development, health, social welfare, cultural or
charitable purposes or a combination thereof, no part of the net income of
which inures to the benefit of any private individual, shall be deductible in
full from the taxable business income of the donor depending on the donee's
compliance with the level of administrative expense and utilization
requirements. EIAaDC
In case of failure on the part of the accredited NGO to comply with the
level of administrative expense and utilization requirements, its donors shall
be entitled only to the limited deductions in an amount not in excess of 10%
in the case of an individual, and 5% in the case of a corporation, of the
donor's taxable income derived from trade, business or profession as
computed without the benefit of Section 34 (H) of the Tax Code of 1997, as
provided for under Section 34 (H) (1) of the same Tax Code.
Donations, contributions or gifts actually paid or made within the
taxable year to an accredited NGO shall be allowed full deductibility on the
taxable year it was incurred pursuant to Section 34 (H) (2) (C) of the Tax
Code of 1997 (BIR Ruling No. DA-124-2004, April 20, 2004 and BIR Ruling No.
S30-016-2004 dated May 6, 2004).
Incidentally, Section 13 (C) of Revenue Regulations (Rev. Regs.) No. 2-
2003 otherwise known as the "Consolidated Revenue Regulations on Estate
Tax and Donor's Tax Incorporating the Amendments Introduced by Republic
Act (R.A.) No. 8424, the Tax Reform Act of 1997" provides, viz.:
"(C) Notice of donation by a donor engaged in business. — In
order to be exempt from donor's tax and claim full deduction of the
donation given to qualified donee institutions duly accredited by the
Philippine Council for NGO Certification, Inc. (PCNC), the donor
engaged in business shall give notice of donation on every donation
worth at least Fifty Thousand Pesos (P50,000) to the Revenue District
Office (RDO) which has jurisdiction over his place of business within
thirty (30) days after receipt of the qualified donee institution's duly
issued Certificate of Donation, which shall be attached to the said
Notice of Donation, stating that not more than thirty percent (30%) of
the said donation/gifts for the taxable year shall be used by such
accredited non-stock, non-profit corporation/NGO institution
(qualified-donee institution) for administration purposes pursuant to
the provisions of Section 101(A)(3) and (B)(2) of the Code."
In relation to the above regulations, Sections 5 and 6 of Rev. Regs. No.

13-98 implementing R.A. No. 8424 specifically, Section 34 (H) thereof
relative to the deductibility of contributions or gifts actually paid or made to
accredited donee institutions in computing taxable income, states that —
"SECTION 5. Certificate of Donations. — All accredited non-
stock, non-profit corporation/NGO are required to issue a certificate of
donation in such form as prescribed by the BIR, on every donation or
gift they receive. Such certificate shall be accomplished by the said
accredited non-stock, non-profit corporation/NGO in triplicate and
distributed within thirty (30) days after the receipt of the donation, as
follows: THSaEC
(a) Original copy — Donor
(b) Duplicate copy — BIR

(c) Triplicate copy — Donee
SECTION 6. Notice of Donations. — The donor, on the other

hand, should give a notice for every donation worth over One Million
pesos (P1,000,000) to the Revenue District Officer where his place of
business is located within thirty (30) days after the receipt of the
Certificate of Donation attaching to the said notice the copy of the
Certificate of Donation issued to him by the accredited non-stock,
non-profit corporation/NGO."
It is clear from the foregoing that the only obligation of the donee for
every donation or gift it receives is to issue in triplicate the proper COD
within thirty (30) days after the receipt of the donation. It should furnish the
donor and RDO having jurisdiction over it (donee) one copy each of the COD
and keep the last copy for itself.
On the part of the donor and for purposes of full deductibility from
his/its taxable business income, the donor should be the one to notify within
thirty (30) days from receipt of the COD, the RDO where his/its place of
business is located, of donations worth Fifty Thousand Pesos (P50,000) which
he/it made and have the COD stamped at the concerned RDO.
In view of the foregoing, CPU Net must first be accredited with the
PCNC which has been duly designated by the Secretary of Finance as the
Accrediting Entity pursuant to Memorandum of Agreement dated January 29,
1998 executed by and between the Secretary of Finance and PCNC's Interim
Chairman in order that donations to it can be exempt from donor's tax and
its donors can claim full deductibility from their respective taxable business
income.
This ruling is being issued on the basis of the foregoing facts as
represented. However, if upon investigation, it will be disclosed that the
facts are different, then this ruling shall be considered null and void.
Very truly yours,
(SGD.) KIM S. JACINTO-HENARES

Commissioner of Internal Revenue

8088 2010 BIR - Ruling - No. - 103 1020210505 12 Mijt7d

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October 12, 2010

BIR RULING NO. 103-10

Sec. 34 (H); Sec. 101

Child Protection Unit Network Organization, Inc.

Attention: Dr. Bernadette J. Madrid, MD

This refers to your request on behalf of Child Protection Unit Network

As represented, CPU Net is a non-stock, non-proﬁt association

4. To do each and everything necessary, suitable and proper at

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

CPU Net has prepared simultaneous symposia and workshops that

In relation to the above regulations, Sections 5 and 6 of Rev. Regs. No.

(a) Original copy — Donor

(b) Duplicate copy — BIR

SECTION 6. Notice of Donations. — The donor, on the other

Very truly yours,

(SGD.) KIM S. JACINTO-HENARES

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

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