Exemption of donor's tax on Laurel-Langley land

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PRESIDENTIAL DECREE NO. 697: Exemption of donor's tax on Laurel-Langley land

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Title Supreme Court: Exemption of donor's tax on Laurel-Langley land

Law: Presidential Decree No. 697

Decision Date: May 9, 1975

Presidential Decree No. 697 grants exemption from donor's tax and recognition as a deductible business expense for irrevocable donations of American-owned private lands acquired under the Laurel-Langley Agreement, subject to certain requirements and limitations.

irrevocable donations

fair market value

qualified donees

A

Qualified Donees for the Tax Exemption

Donations must be made to the following to qualify for tax exemption:
1. The National Government or its non-profit entities or political subdivisions.
2. Organizations exempt from donor's tax under other laws.
3. Charitable or scientific organizations with a nationwide scope, recognized entities like Philippine Red Cross, Community Chests, Boy Scouts of the Philippines, Philippine Heart Foundation.

Donations Not Qualified for Exemption

Donations to family-owned or controlled foundations are excluded.
Foundations created specifically to receive land donations or limited purpose foundations do not qualify.

Recognition of Donations as Deductible Business Expenses

Qualified donations can be deducted as business expenses for income tax purposes.
Donors must specify the deduction period in the donation proposal, not exceeding four years including the donation year.
Deductions are taken in equal increments over the specified period.
This particular incentive is exclusive to American private landowners.
Donation proposals must be submitted before May 27, 1975 to avail incentives.

Effectivity

The decree takes effect immediately upon issuance on May 9, 1975.

END