BIR exempts donated gadgets for public school from donor’s tax, VAT, and ATRIG
The Bureau of Internal Revenue (BIR) has recently released an order that entitles donated gadgets for public schools to tax incentives.
As stated by the bureau’s Revenue Regulations Circular No. 26-2020, donors of personal computers, laptops, tablets, or similar equipment use in teaching and learning to public schools shall be exempted from tax, VAT, and ATRIG. The order is compliant with Section 4 of RA No. 11494, or also known as “Bayanihan to Recover as One Act”, that covers all donations of identified equipment for use in public schools.
Under the order, donors of the mentioned devices for teaching and learning in public schools shall be entitled to tax incentives. This includes deduction from the gross income of the amount of contribution or donation provided that the Deed of Donation indicates the detail of the items donated including its quantity or number, as well as the amount or value of the donation. The deduction shall be availed in the same taxable year in which the expenses have been paid or incurred. The taxpayer can substantiate the deduction with sufficient documents such as sales invoice/s, delivery receipt, and other adequate records. It should include the number of expenses being claimed as a deduction and proof or acknowledgement of receipt of the contributed or donated property by the recipient public school.
Imported donations shall be exempted from VAT provided that the importer or consignee should
present a Deed of Donation duly accepted by the Department of Education (DepEd), or Commission on Higher Education (CHED), or TESDA. Foreign donations are also exempted from Authority to Release
Imported Goods (ATRIG) under Revenue Memorandum Order (RMO) No. 35-2002, as amended. The BIR may, however, conduct a post-investigation audit on the importations released by the Bureau of Customs without ATRIG pursuant to this regulation.
Furthermore, it is also stated that the amount of donation shall be based on the actual cost of personal computers, laptops, tablets, or similar equipment donated. However, if the personal computers, laptops, tablets, or similar equipment donated were already used, the depreciated value of donation shall be taken into consideration.
The implementation of the Act is effective from September 15 until December 19, 2020.
Read the full Revenue Regulations No. 26-2020 here.