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BATAS PAMBANSA BILANG. 45BATAS PAMBANSA BLG. 45 - AN ACT
AMENDING PARAGRAPH (h) OF Sec. 30 OF THE NATIONAL INTERNAL REVENUE
CODE OF 1977, AS AMENDED, AND FOR OTHER PURPOSES
Section 1.
Paragraph (h) of Sec. 30 of the National Internal Revenue Code is
hereby amended to read as follows:
"(h) Charitable
and other contributions. —
"(1) In General. — Contributions or gifts actually
paid or made within the taxable year to or for the use of the
Government of the Philippines or any of its agencies or any political
subdivision thereof for exclusively public purposes, or to domestic
corporations or associations organized and operated exclusively for
religious, charitable, scientific, youth and sports development,
cultural or educational purposes of for the rehabilitation of veterans,
or to social welfare institutions, no part of the net income of which
inures to the benefit of any private stockholder or individual to an
amount not in excess of six per centum in the case of an individual,
and three per centum in the case of a corporation, of the taxpayer's
taxable net income as computed without the benefit of this and the
following subparagraph.
"(2)
Contributions deductible in full. — Notwithstanding the provisions of
the preceding subparagraph, donations to the following institutions or
entities shall be deductible in full:
"(A) Donations to the Government. — Donations to the
Government of the Philippines or to any of its agencies or political
subdivisions, including fully owned government corporations exclusively
to finance, to provide for, or to be used in undertaking priority
activities in education, health, youth and sports development, human
settlements, science and culture, and in economic development according
to a national priority plan to be determined by the NEDA, in
consultation with appropriate government agencies, including its
regional development councils, and private philanthropic persons and
institutions: Provided, however, That any donation which is made to the
Government or to any of its agencies or political subdivisions not in
accordance with the said annual priority plan shall be subject to the
limitations prescribed in subparagraph (1) of this Section .
"(B) Donations
to certain foreign institutions or international organizations. —
Donations to foreign institutions or international organizations which
are fully deductible in pursuance of or in compliance with agreements,
treaties, or commitments entered into by the Government of the
Philippines and the foreign institutions or international organizations
or in pursuance of special laws.
"(C) Donations to certain private foundations. — The
term "private foundation" means a non-profit domestic corporation;
(i) 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;
(ii) Which, not
later than the 15th day of the third month after the close of the
foundation'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 Minister of
Finance in accordance with the rules and regulations to be promulgated
under Sec. 2 hereof;
(iii) The level of administrative expense of which
shall on an annual basis conform with the rules and regulations to be
prescribed by the Minister of Finance but in no case to exceed 30 per
cent of total expenses;
(iv) The assets
of which is the event of dissolution would be distributed to another
non-profit domestic corporation organized for similar purpose or
purposes, or to the State for public purpose, or would be distributed
by a court to another organization to be used in such manner as in the
judgment of said court will best accomplish the general purposes for
which the dissolved organization was organized.
"Subject to such terms and conditions as may be prescribed by the
Minister of Finance, the term "utilization" means:
(i) any amount
in cash or in kind (including administrative expenses) paid or utilized
to accomplish one or more purposes for which the private foundation was
created or organized.
(ii) Any amount paid to acquire an asset used (or
held for use) directly in carrying out one or more purposes for which
the foundation was created or organized.
"An amount set aside for a specific project which comes within one or
more purposes of the foundation may be treated as a utilization, but
only if, at the time such amount is set aside, the private foundation
establishes to the satisfaction of the Commissioner of Internal Revenue
that the amount will be paid for the specific project within a period
to be prescribed in regulations to be promulgated by the Minister of
Finance, but not to exceed 5 years, and the project is one which can be
better accomplished by setting aside such amount than by immediate
payment of funds. The Minister of Finance shall promulgate rules and
regulations to implement this subparagraph.
"(3) Valuation.
— Properties other than cash donated shall be valued in accordance with
the rules and regulations prescribed by the Minister of Finance in
consultation with the appropriate government agencies.
"(4) Proof of deductions. — Contributions or gifts
shall be allowable as deduction only if verified under the regulations
prescribed by the Minister of Finance."
Sec. 2. Implementing regulations. — The Minister
of Finance shall, within 90 days after approval of this Act, after
consultation with the appropriate government agencies, promulgate rules
and regulations to implement the provisions of this Act consistent with
national socio-economic development programs.
Sec. 3. Transitory provisions. — All organizations
or institutions which are qualified donees for purposes of the full
deductibility of charitable contributions either under the National
Internal Revenue Code of 1977 or under special laws shall apply for
re-qualification with the Commissioner of Internal Revenue within the
period provided by the implementing regulations, and all donations to
such organizations or institutions during the period for
re-qualification as donees for full deductibility of charitable
contributions thereto under this Act shall be allowed.
Sec. 4. Repealing clause. — The provisions of any
general or special law allowing full deductibility of donations to any
institution or entity (except donations made under Presidential Decrees
Nos. 697 and 698) or allowing deduction of any investment for the
purchase of cultural properties are hereby repealed or modified
accordingly.
Sec. 5. Effectivity. — This Act shall take effect
upon its approval.
Approved: December 18,
1979.
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