BIR: Gadgets donated to schools tax deductible

With blended learning and online classes in full swing, donors of computers and other gadgets to public schools will be extended tax deductions under the Bayanihan to Recover as One law, or Bayanihan 2, the Bureau of Internal Revenue (BIR) said on Thursday.

Revenue Regulations No. 26-2020 signed by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay said the tax perk under Bayanihan 2 covered donations of personal computers, laptops, tablets, mobile phones, printers and other similar equipment to be used by both teachers and students in government-run schools, including state universities and colleges (SUC) as well as vocational institutions under the Technical Education and Skills Development Authority (Tesda).

This tax incentive will apply to donations made during the implementation of the Bayanihan 2 law from Sept. 15 until Dec. 19.

The BIR said donors would enjoy tax deductions from their gross income equivalent to the amount of donation.

Deed of donation

Donors must indicate in their deeds of donation the types and quantities of donated items as well as their total value (the actual acquisition cost of new ones or their depreciated value for used items) by including sales invoices and delivery receipts on top of proof or acknowledgment of receipt by the beneficiary schools.

“The deduction shall be availed of in the taxable year in which the expenses have been paid or incurred,” the BIR added.

The BIR said foreign donations would be exempt not only from value-added tax (VAT) but also the issuance of the authority to release imported goods (ATRIG) in order to fast-track their release by the Bureau of Customs (BOC).

“The BIR may, however, conduct postinvestigation audit on the importations released by the BOC without ATRIG pursuant to this regulation,” it said.

The BIR said local donations in which the items were originally for sale or business use by the donor before they were donated “shall not be treated as transaction deemed sale subject to VAT” under the Tax Code.

“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,” the BIR added.

During the implementation of the earlier Bayanihan to Heal as One law at the height of the COVID-19 lockdown from March to June, cash and goods donations in response to the pandemic were not only to be exempted from donor’s tax but will also be deducted from companies and individuals’ gross income subjected to tax.

When asked last September, Deputy Commissioner Arnel S.D. Guballa told the Inquirer that the BIR had yet to determine how much in tax exemptions would be extended to donor-taxpayers.

Separately, RR 27-2020 also issued by Dominguez and Dulay temporarily suspended the mandatory filing and 90-day processing period for VAT refund claims during the implementation of Bayanihan 2.

RR 27-2020 listed down the extended deadlines to file VAT refunds for calendar and fiscal quarters ending in September, October, November and December 2018 to give taxpayers more time to prepare and comply amid prolonged COVID-19 quarantine.

Also, RR 27-2020 laid down the schedule that taxpayers filing VAT refund claims should follow if their areas remained under community quarantine by the time that the Bayanihan 2 law expires.