MEMORY

MEMORYAID
AIDIN
INTAXATION
TAXATIONLAW
LAW

SAN
OF
SANBEDA
BEDACOLLEGE
COLLEGE
OFLAW
LAW2003
2003CENTRALIZED
CENTRALIZEDBAR
BAROPERATIONS
OPERATIONS
Reproduction in any form of this copy is strictly prohibited!!!
Reproduction in any form of this copy is strictly prohibited!!!

ANNEX E: CONTRIBUTIONS AND DONATIONS

A. Deductible in full

B. Deductible, subject to limitation

1) Recipient is:
(a) Government of the Philippines;
(b) Any of its agencies or political subdivisions; or
(c) Any fully-owned government corporation

1) Recipient is:
(a) Government of the Philippines;
(b) Any of its agencies or political subdivisions

For priority activity in:

1.
2.
3.
4.
2)

Science;
Education
Culture;
Health;

5. Economic Development
6. Human Settlement
7. Youth and Sports
Development

Recipient is an accredited non-government

organization, organized/operated for (purposes)
(a) Scientific;
(b) Educational;
(c) Cultural;
(d) Character building/youth and sports
development
(e) Charitable
(f) Social welfare
(g) Health
(h) Research

For a non-priority activity in any of the areas mentioned

in A, and exclusively for a public purpose

2) Recipient is an accredited non-government

organization, organized/operated for (purposes)
(a) Scientific;
(b) Educational;
(c) Cultural;
(d) Character building/youth and sports
development
(e) Charitable
(f) Social welfare
(g) Religious
(h) Rehabilitation of Veterans
(i) Social welfare institutions

And satisfying the following conditions:

1.
2.
3.

3)

The donation must be utilized not later than

the 15th day of the 3rd month following the
close of its taxable year.
The administrative expense must not exceed
30% of total expenses.
Upon dissolution, assets must be distributed
to another non-profit domestic corporation or
to the state.

If the conditions in Table A is not complied with.

1.
bject
limitation:

(a) Individual - 10% taxable income from trade

business or profession before contribution
(b) Corporation - 5% taxable income from trade
business or profession before contribution

Recipient is a foreign or international organization

with an agreement with the Philippine Government
on deductibility, or in accordance with special law.

Illustration: X Co., a domestic corporation, had a gross income from

business of P600,000 and business expenses of P200,000. It made during the
year the following contributions.
To International Rice Research Institute (IRRI)
P 15,000
To Cultural Center of the Philippines (CCP)
10,000
To Rehabilitation of Veterans, Inc.
12,000
To Quiapo Catholic Church
20,000
The taxable income will be computed as follows:
Gross Income
P 600,000
Less: Deductions for business expenses
200,000
Taxable income before any contributions
P 400,000
Less:
Contributions deductible in full
To IRRI
P 15,000
To CCP
10,000
P 25,000
Contributions subject to limitation
To Rehabilitation of Veterans
To Quiapo Catholic Church
Total actual
5% (corporation) of P400,000
Allowed (whichever is lower)

Su
to

P 12,000
20,000
P 32,000
20,000
20,000

45,000

E-1
TAXATION LAW COMMITTEE: Chairperson: Rhodaline Regoso; Asst. Chairperson & EDP: Maricel Alisuag; Subject
Heads:Junelet Mataro, Michelle Alvarez, Efren Dizon, Khan Guieb; Members: Alexis Cervantes. Leizl Calimaran, Berna
Quibal, Noreli De Claro, Jocelyn Gamboa, Albert Rodriguez, Karla Cabel, Joey Caraig, Rodolfo Quitolbo, Liam Pagdanganan,
Paul Lawrence Lim, Alder Delloro, John Ivan Tablizo, Ria Ibaviosa, Pancho Vasquez, Aileen Roxas, Leif Opia

MEMORY
MEMORYAID
AIDIN
INTAXATION
TAXATIONLAW
LAW

SAN
OF
SANBEDA
BEDACOLLEGE
COLLEGE
OFLAW
LAW2003
2003CENTRALIZED
CENTRALIZEDBAR
BAROPERATIONS
OPERATIONS
Reproduction in any form of this copy is strictly prohibited!!!
Reproduction in any form of this copy is strictly prohibited!!!

Taxable Income

P 355,000

E-2
TAXATION LAW COMMITTEE: Chairperson: Rhodaline Regoso; Asst. Chairperson & EDP: Maricel Alisuag; Subject
Heads:Junelet Mataro, Michelle Alvarez, Efren Dizon, Khan Guieb; Members: Alexis Cervantes. Leizl Calimaran, Berna
Quibal, Noreli De Claro, Jocelyn Gamboa, Albert Rodriguez, Karla Cabel, Joey Caraig, Rodolfo Quitolbo, Liam Pagdanganan,
Paul Lawrence Lim, Alder Delloro, John Ivan Tablizo, Ria Ibaviosa, Pancho Vasquez, Aileen Roxas, Leif Opia