BIR Regs on Tax Deductibility for NGOs

Accreditation is mandatory prior to registration with the BIR as qualified donee institutions.
Applicants must submit incorporation documents, SEC certificate, affidavit of modus operandi, and financial statements or projections.
Major accreditation criteria include clear mission and goals, adequate resources, effective program implementation and evaluation, and capability for future planning.
Waivers for audited financial statements can be granted for newly organized bodies of national significance.
Previously accredited non-stock, non-profit corporations have three years to secure certificate re-accreditation, else their registration may be cancelled.
Accredited certificates are granted for a maximum of five years for existing NGOs, three for new ones.
The Accrediting Entity must notify denial reasons, allowing one year for reapplication after recommendations are implemented.
Finance Secretary and BIR Commissioner oversee compliance and coordination.

Donations to accredited non-stock, non-profit corporations have limited deductibility: 10% cap for individuals, 5% for corporates of income excluding such deduction.
Donations to accredited NGOs enjoy full deductibility if they use funds actively on their purposes within deadlines, keep admin expenses below 30%, and have approved asset distribution plans upon dissolution.
Donations other than money are valued at acquisition cost.
Board members must serve without remuneration.
Donations to accredited NGOs are exempt from donor’s tax, with up to 30% used for administrative costs.

Amounts set aside for specific projects require prior written approval from the Commissioner of Internal Revenue.
Certification from accrediting entity is sufficient to obtain Commissioner’s approval if the project is validated.
Application to set aside must detail project nature, purpose, costs, funds, location, and disbursement period.
Proper records and evidence of funds set aside or invested are required.

Accredited non-stock, non-profit corporations/NGOs must issue certificates of donation in triplicate within 30 days of receiving donations.
Donors must notify the Revenue District Officer of donations exceeding P1,000,000 within 30 days of obtaining donation certificates.

Donors claim donation deductions when filing income tax returns.
Accredited NGOs must file annual information returns within 4 months from taxable year-end.
Returns are filed with the Revenue District Office where the donor's or donee's business is located.

Donors must present Certificates of Donation showing actual receipt and amount or acquisition cost for property donations.
Donors claiming donor’s tax exemption must prove donation amount, property zonal value, acquisition cost or depreciated/book value.
NGOs must submit lists of donations, income, activities/projects, fund statuses, and declarations confirming compliance and non-inurement of income.

The BIR has authority to annually audit accredited NGOs’ books, records, and operations to ensure compliance with tax exemption conditions and laws.

Lending income or property without security or reasonable interest, except approved micro-credit programs.
Buying or selling property without adequate consideration.
Diverting income or property to insiders or related parties.
Using resources for unauthorized purposes.
Engaging in illegal or public policy-contrary activities.

Accrediting Entity can withdraw accreditation if criteria are no longer met.
Withdrawal must be reported to BIR for possible revocation of registration.
Violations of regulations by NGOs lead to withdrawal and revocation.
Donors involved in violations lose deduction benefits and may face tax assessments and penalties.

Existing contradictory or inconsistent revenue issuances and regulations are repealed or amended accordingly.

Regulations take effect fifteen (15) days after publication in the Official Gazette or a newspaper of general circulation in the Philippines.