AMID the shift to online classes, the Bureau of Internal Revenue (BIR) said that donations of personal computers, laptops, tablets and similar equipment are exempted from the payment of donor’s tax.
BIR, in a recently released regulation, said the tax exemption was given as mandated by Sections 101 (A) (2) and (B) (2) of the Tax Code.
The revenue regulation corresponds to a section in the Bayanihan to Recover as One Act about the donations of said equipment for use in public schools.
The imports of such equipment—should it be a foreign donation—by the Department of Education (DepEd), Commission on Higher Education (CHED) and Technical Education and Skill Development Authority (Tesda) will also be free of value-added tax (VAT).
Other importers may avail themselves of VAT-free transactions if they present a deed of donation approved by the mentioned agencies.
“In the case of local donation where the personal computers, laptops, tablets, or similar equipment are originally intended for sale or for use in the course of business by the donor, the same shall not be treated as transaction deemed sale subject to VAT under Section 106 [B] [l] of the Tax Code,” BIR said.
“Furthermore, any input tax VAT attributable to the purchase of donated personal computers, laptops, tablets, or similar equipment not previously claimed as input tax shall be creditable against any output tax,” it added. The same rules also apply to donations by economic zone locators to DepEd, CHED and Tesda.
The donors of the computers, laptops, tables and similar equipment are entitled to a deduction from their gross income. It shall be availed in the taxable year in which the expenses were incurred.
The taxpayer should provide evidence of the donation, such as sales invoice, delivery receipt and other records. These include the amount of spending claimed as deduction and the proof of receipt of the donation by the public school.
The valuation of the donated equipment is based on the actual acquisition cost. If the donated items had been used already, the depreciated amount should be considered. The coverage of the regulation is from September 15 to December 19.