DONORS to qualified donee institutions duly accredited by the Philippine Council for Non-Government Organizations Certification, Inc. (PCNC) are exempt from donor’s tax provided they comply with certain conditions. In addition, donors may avail of full deduction of their donation to these accredited institutions. In connection to this, the BIR recently issued Revenue Memorandum Circular (RMC) No. 86-2014 pursuant to Section 8 of Revenue Regulations (RR) No.13-98.
Under the said RR, taxpayers claiming donations as deductions from gross income must present to the BIR the Certificate of Donation indicating the actual receipt, date of donation and the amount of cash or acquisition cost, if in property. RMC 86-2014 clarifies the valuation of the donations actually paid or made in computing taxable income, as part of the substantiation requirement under Section 8 of RR No. 13-98.
The Certificate of Donation (BIR Form 2322) shall contain the information required in Section 8 of RR No, 13-98 following the prescribed format in RMC 86-2014. The BIR Form 2322 shall consist of two parts:
1.) A donee certification on the date of receipt of the donation, indicating the subject matter (i.e. cash or property), and description of the property donated. It must be signed by an authorized representative of the donee organization.
2.) A donor statement on the description, acquisition cost and net book value of the property donated as reflected in its financial statements of the donor. The statement must be accompanied by a deed of sale/bill of sale to prove the acquisition cost of the properties. It must be signed by the donor or authorized representative.
RMC No. 86-2014 shall take effect immediately.
(Source: Punongbayan & Araullo)