They Provided Assistance to Public Schools such as Construction and repair of school bldgs.

School supplies for school children Teacher trainings Scholarships for students and teachers E-libraries, multimedia packages and computer hardwares and softwares Health and nutrition interventions Various other interventions
Sample computation Actual Contributions received In 2007 Additional 50% Deduction as Tax Incentive Granted under R.A. 8525 Total Allowable Deductions for Income Tax Purposes LEGAL BASIS REPUBLIC ACT 8525 (Adopt-a-School Law of 1998) An Act establishing the Adopt-a- School Program providing incentives therefore, and for other purposes. PURPOSE OF RA 8525 The Program was established to allow private entities to assist public schools, whether elementary , secondary or tertiary preferably located in the twenty poorest provinces (Sec. 3) INCENTIVES GRANTED Additional 50% deduction from gross income of the amount of donation/contribution (Sec 5) P119 Mil.

59 Mil.

P178 Mil

Entitlement to have the donors name emblazoned in their intervention beneath the words Adopt-a-School (Sec 6) Representation in the local school board (Sec 6

IMPLEMENTING BODY A Coordinating Council was created to coordinate and monitor the implementation of the Act composed of the following (Sec 7): Secretary of DepED as Chairperson Chairman of CHED as Co-Chairperson Director General of TESDA as Co-Chairperson Chairperson of the NAPC Representative of the National Federation of Chambers of Commerce and Industry appointed by the President

BIR Promulgated REV. REGS 10 s. 2003 To Implement the Tax Provisions of the Adopt-a-School Law (RA 8525)

WHAT IS A PRIVATE ENTITY IT SHALL REFER TO (Sec 2(d)) Individual engaged in trade or business or engaged in the practice of his profession, or; Other business organizations, like partnerships, corporations or cooperatives; Either resident or non-resident; Who/which teams up with DepED, CHED and TESDA; Towards providing much needed assistance and services to public schools

INCENTIVES GRANTED UNDER THE REGULATIONS Deduction from its/his gross income of 150% of the value of the donation made under the Program (100% under Sec 3(H) of the Tax Code and an additional 50% under RA 8525 as promulgated by the this Regulations (Sec 3 (a)): The deduction shall be availed of in the taxable quarter/year in which the expenses have been paid or incurred; The taxpayer can substantiate the deduction with sufficient evidence, such as ORs or delivery receipts and other adequate records. Exemption of assistance made by the donor from the payment of donors tax pursuant to Secs 101 (A)(2) and (B)(1) of the Tax Code of 1977 (Sec 3 (b)) In case of foreign donations, VAT and excise tax on the importation of goods under the program shall be assumed by DepED, CHED, TESDA or the importer thereof, except in cases where the importation is exempt from VAT under Sec. 109 of the Tax Code (Sec. 4 (a)) Sec 34 (H) of the Tax Code 100% Deductibility of Donations and Charitable Contributions (2)(a) Donations to govt. or any of its political subdivisions or agencies including fully owned corporations to be for priority activities in education, health, youth and sports development, human settlements, science and culture and on economic development according to the National Priority Plan (2)(b) Donations to foreign institutions or international organizations in pursuance of the agreements and treaties (2) (c) NGOs (non-profit domestic corporations) exclusively for scientific, research, educational character building and youth and sport development, health, social welfare or charitable purposes provided: Part of its income will not inure to benefit of any individual Level of admin expenses not more than 30% of total expenses

See the Difference Sample Income Statement (in P Mil)

Donation Sales Less: Cost of Sales Gross Income Less: Operating Expenses Salaries, utilities, etc. Donation to a public sch. Inc. Before Inc. Tax Income Tax Net Income 175.0 85.0 90.0 15.0 15.0 75.0 26.3 48.7 2.0* 15.0 17.0 73.0 25.2 47.8 No Donation Under ASP 175.0 85.0 90.0

* 100% deduction as business exp. allowed under Section 34 (H) of the Tax Code See the Difference Computation of Income Tax ( in P Mil) No Donation Income Before Income Tax Additional 50% deduction for donations under RA 8525 Taxable Income Income Tax (35% of taxable income) 75.0 0.0 75.0 26.3 Donation Under ASP 73.0 1.0 72.0 25.2

Tax Savings for the donation 1.1 Allowable tax deductions the ADOPT-A-SCHOOL PROGRAM(150%) 100% allowable deduction under Section 34 (H)(a)(2) Additional 50% deduction under RA 8525 (as promulgated by RR 10-2003) Total 100% 50% 150% P 2 Mil 1 Mil P 3 Mil

Forms of Assistance Example Valuation Guides

Cash

Actual amount appearing in the Official Receipt

school sites, lots, land Lower of fair market value or book value/ depreciated value Acquisition cost or if used, depreciated value Lower of agreed value of services or actual expenses incurred Lower of acquisition cost of the donor or actual cost at the time of the donation

Real property

Personal property

Vehicles, furniture, etc.

Services

training for teachers and school heads, internet connection textbooks, school supplies, reading materials, laboratory equipment, school building, computer units,

Goods

Standard Docs to Support Claim for Tax Incentives under ASP Copy of notarized Memorandum of Agreement Copy of notarized Deed of Donation and Acceptance Other Docs to Support Claim for Tax Incentives under ASP Form of Assistance Required Documents Cash Real property Official Receipt Official receipts or any document showing the actual value of the contribution/donation Certificate of title and tax declaration Other adequate records showing the direct connection or relation of the expenses being claimed as deduction or donation

Goods/ Personal Property

Pictures of actual distribution of the product distributed to the students Summary of expenses : 1. Date distributed 2. Recipient school 3. Cost of goods distributed 4. Suppliers name 5. Purchase invoices 6. Date purchased Proof of services rendered Summary of expenses : 1. Date distributed 2. Recipient school 3. Value of the services rendered 4. Service providers name 5. Invoices showing payment to service provider

Services