Tax Incentives for Employers and Donors under RA 7277

Private entities employing qualified disabled individuals as regular employees, apprentices, or learners receive additional deductions equal to 25% of salaries and wages paid to such persons.
Entities must provide certifications from the Department of Labor and Employment (DOLE) and Department of Health (DOH) regarding employment and qualifications.
Private entities that modify or improve physical facilities to accommodate disabled employees get a 50% additional deduction on direct costs of such modifications.
Applies only to modifications beyond those mandated by Batas Pambansa Bilang 344.

Donations, bequests, subsidies, or financial aid to government and recognized organizations for disabled persons are exempt from donor’s tax.
Donations deductible from gross income subject to limits under Sections 29(h) and 94 of the NIRC.
Donations from foreign countries are exempt from taxes and duties on importation, under applicable laws and international agreements.

Disabled Persons: Persons with mental, physical, or sensory impairments limiting normal activities.
Reasonable Accommodation: Changes or improvements to facilities or work conditions enabling disabled persons to perform employment functions.
Qualified Individual: Disabled individual capable of performing job functions with or without accommodation.
Government Agencies and Organizations of Disabled Persons: Defined as registered entities with appropriate tax-exempt status dedicated to disabled persons’ welfare.

Employers must submit employment certifications, disability certifications, proof of salary payment, and tax withholding documents.
For facility modifications, detailed certified cost statements and inspections by government agencies required.
Donations must be substantiated via certificates of donation indicating date and fair market value.

Donations to government agencies and organizations have donor tax exemption provided administrative expenses do not exceed 30%.
Income tax deduction caps: 6% of taxable business income for individuals and 3% for corporate donors.
Accredited organizations may allow full deduction from taxable business income.

Organizations must issue certificates of donation within 30 days, detailing the value, date, and donee details.
Annual reporting to BIR and NEDA required, including detailed donation lists, project descriptions, financial statements, and compliance affirmations.

Donations are to be used exclusively for rehabilitation, social welfare, or related projects for disabled persons.
No more than 30% of donations may be used for administrative expenses.

Income from profit-generating activities or passive investments by organizations is taxable.
Organizations act as withholding agents for certain payments.

Organizations must maintain accurate records and file annual tax returns with audited financial statements.
BIR may verify compliance and tax-exempt status.

Violations lead to suspension or cancellation of registration and denial of tax-deductibility or exemptions.

Regulations effective 15 days after publication in Official Gazette or widely circulated newspaper.