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The Adopt-A-School Program

Potential engineers, scientists, mathematicians, and artists are in our schools, but they may
not have a chance to pursue their dreams due to economic difficulty. Their parents dream of
a better life for their children and strive hard to provide well for them, but in many cases, even
just the provision of food for each household’s table is already a struggle.

The government allots the biggest share of the national budget to public basic education, but
the amount still cannot keep up with the increasing student population. There are even more
children who are out on the streets and who have to be shepherded into the schools, but
government resources are simply not enough to provide them the free, quality education to
which they are all entitled.

We need generous hearts in the private sector to realize the spirit of Republic Act 8525
or the Adopt-A-School Act, enacted in 1988 for the very purpose of providing a venue
for the strong and dynamic private sector to participate in nation-building through
investments in the education of Filipino children. The rewards of such investments come
through an educated generation that will succeed ours, run our enterprises, and steer this
nation to greater heights.

Over the years, DepEd introduced interventions to reduce student dropouts and keep the
youth off the streets. It has sought to increase student achievement levels and improve
teacher performance. It continues to bring the issues and needs of public education to every
Filipino who cares, in an effort to invite each and everyone to help boost education
opportunities for our young.

DepEd, through the Adopt-A-School Program (ASP), sincerely invites all members of private
entities to accept our offer of active partnership in the noble goal of educating all Filipinos.
Education is the key to national growth.

With Adopt-A-School, each Filipino can have the opportunity to enjoy his right to education, to
open his eyes to the wonders and challenges of the world, to pursue his dreams, and to
contribute capably towards the nation’s progress.

Every Filipino child deserves to finish school.

Every Filipino deserves the benefits of an education.
This nation needs an educated citizenry.

There are many ways by which you can help.

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Packages

Infrastructure, Physical Facilities, Furniture, and Real

Estate
The construction of additional classrooms will decongest our crowded public schools and
provide more substantial school hours for the children. Badly-needed chairs, desks,
blackboards, computer laboratories, wash facilities, water systems and toilets must also be
provided, and these will likely create a physical environment that is conducive for learning.

Learning Support
Our private-sector partners can give public school children exciting and dynamic
opportunities for learning at the larger world outside of school by sponsoring relevant field
trips. Students and teachers will also benefit from audio-visual educational materials such as
e-books, educational films, e-libraries, and non-digital teaching aids such as pop-up materials
and colored illustrations.

Health and Nutrition

Appropriate remedies for the health and nutrition problems of public school children will help
improve students’ school performance and learning retention. Our partners can sponsor
feeding programs, essential health care programs, medical-dental missions, deworming
interventions, and the provision of vitamins, nutritional supplements, eye check-ups and
eyeglasses to students and teachers.

Reading Program
By providing books and supplementary reading materials to our public school children, we
open up a rich world of information to them and help develop the habit of reading, a key to
improving academic performance.

Technology Support
We welcome the private sector’s continuing support in promoting DepEd’s imperative thrust
to integrate fast-changing technology within basic education. Laptops, computers, internet
connectivity, television sets, DVDs, and e-learning materials are always needed to make
classroom instruction interactive and effective.

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Packages

Direct Assistance
School supplies, stipends, and other forms of financial and material assistance may be
extended to public school children to alleviate their parents’ financial burden and obligations.

Training and Development

Private sector groups and individuals can extend assistance not only to schoolchildren but
also to their teachers. Sponsoring training programs in teacher education institutions will
greatly help our teachers gain relevant skills that will update their knowledge and increase
their effectiveness in the classrooms.

Assistive Learning Devices for students with special

needs
Assistive learning devices are used to increase or improve the functional capabilities of a
child with special needs. These range from no-tech devices (pencil grips, dry-erase boards,
special chairs, picture cards) to mid-tech (tape recorders, spelling-check devices, overhead
projectors) and hi-tech devices (software, computerized systems, specialized keyboards and
peripheral devices).

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Frequently Asked Questions
What are the benefits an adopting private entity can avail of under the Adopt- a-School
Program?

Active involvement in the Program can be mutually beneficial to both parties concerned. While DepEd
gets its schools improved, adopting private entity in return, may obtain tax incentives, strengthened
corporate image and goodwill within the school community.

Where can a private entity obtain the certification / endorsement so that it can avail of the tax
incentives as provided for under the Adopt-a-School Law?

The private entity should request an endorsement from the DepEd Central Office in Pasig thru the
Adopt-a-School Secretariat. The endorsement is approved by DepEd.

What are the requirements needed by the Revenue District Office of the Bureau of Internal
Revenue (BIR) in considering the application of the private entity for tax incentives?

The private entity applying for tax incentives must submit the following:

1. Duly notarized /approved Agreement

2. Duly notarized Deed of Donation
3. Duly notarized Deed of Acceptance
3. Official receipts showing the actual value of the donation, and
4. Certificate of title and tax declaration (if the donation is in the form of real property).

For donations coming from overseas, what are the documents required to avail of duty-free
entry of goods?

The documents required prior to the issuance of duty-free certification by DepEd and the
Department of Finance (DOF) are the following:

From the Donor

Bill of Lading, Air Waybill, Parcel Notice, other shipping documents,
Commercial Invoice and Packing List

From the Donee

Notarized Deed of Donation, Deed of Acceptance, and Memorandum of Agreement (or
Memorandum of Understanding)

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Frequently Asked Questions
Who can help?

Any private individual, group, organization or institution can become partners in education. There are
however, basic qualifications of participants to the Program.

A private entity that intends to participate should have a credible track record to be supported by a
certificate of registration with the Securities and Exchange Commission (SEC) or with the Cooperative
Development Authority (CDA).

The private entity should have been in existence for at least a year.

What assistance can be provided?

The program carries a menu of options called packages that a stakeholder can select from. Packages
range from building classrooms, laboratories, staff development, nutrition program, e-learning, to the
provision of instructional materials. The packages are designed to meet the school’s needs in
accordance with the private sector’s capacity and thrusts.

Which schools need assistance?

Any government school, whether elementary, secondary, post-secondary or tertiary preferably

located in any of the current poorest provinces/municipalities can avail of the donations under the
Program. Priority shall be given to schools located in the poorest provinces as determined by the
National Statistical Coordination Board (NCSB), low income municipalities and other schools with
undernourished learners, poor but high performing learners, severe classroom shortage, insufficient
budget or funds and/or deficient in number of textbooks and instructional materials.

How will recipient schools be selected?

The adopting private entity has the prerogative of identifying the school of its choice, as well as the
area and geographic location where it wishes to place its support. In case the adopting private entity
has no particular school in mind, any of the three education agencies will provide the adopting entity
a list of priority schools and their identified needs.

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Adoption Procedures
Schools can be adopted by an individual, group, another school, company, foundation or
organization.

The Adopt-A-School Secretariat shall facilitate the linkage between the adopting individual and the
target school.

The Secretariat will provide the adopting entity with different adoption packages and the list of
prospective schools with their corresponding needs.

The adopted school shall sign a Memorandum of Agreement (MOA) with the adopting private
entity. The MOA shall specify the terms and conditions of the adoption including the tasks and
responsibilities of the private entity and the school.

The parties involved in the signing of the MOA will be the adopting entity and the head of the
school concernced. In cases where the adopting entity adopts multiple schools in a certain
division, a MOA shall be facilitated between the adopting entity and the corresponding DepEd
official. For a school located within a particular Division, the Schools Division Superintendent will be
the official signatory; for regional project coverage, the Regional Director; and for projects that are
national in scope, the Secretary of Education shall sign the MOA.

The MOA will be subject for review and approval by the Adopt-A-School Secretariat. The
Agreement shall last two years with the possibility of extension.

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Memorandum of Agreement (sample)

This Agreement made and entered into this _____ day of ___________ at Pasig City, Metro
Manila, Philippines, by and between,

The DEPARTMENT OF EDUCATION , an Agency of the government, with office address at

DepEd Complex Meralco Ave., Pasig City Metro Manila, represented by its Secretary,
_______________________________, herein referred to as “ DepEd”.

-and-

(company/organization’s name), a corporation/organization organized and existing under the

laws of the Republic of the Philippines, with office address at
__________________________________________________ represented in this transaction by its
President/Chairman (name)____________________________, hereinafter referred to as the
“PROPONENT’;
WITNESSETH:

WHEREAS , Republic Act 8525, otherwise known as An Act Establishing the “Adopt-A-School
Program” and Providing Incentives Therefore and for Other Purposes, was entered to encourage
private companies to assist in the delivery of better quality education to public schools in the country,
particularly in the poverty-stricken provinces;

WHEREAS, Revenue Regulations No. 10 s. 2003, Implementing the Tax Incentives Provision
of RA 8525 otherwise known as the Adopt-a-School Act of 1998 has been issued by the Department
of Finance thru the Bureau of Internal Revenue;

WHEREAS, DepEd has the responsibility of securing resources to make our public schools
competitive and is now calling on the private sector to serve as a major partner in the nation’s
development and in the improvement of the public education system;

WHEREAS, DepEd believes that one way of ________________________________(e.g.

addressing the classroom shortage in public schools) is by the provision of _______________ (e.g.
new school building );

WHEREAS, the PROPONENT is a business enterprise engaged in ___________________ ;

and

WHEREAS, the PROPONENT, has proposed to DepEd the _____________ (e.g.

construction of a three –classroom-school building).

NOW THEREFORE, for and in consideration of the foregoing premises and the terms and
conditions herein set forth, the parties hereby agree as follows:

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Memorandum of Agreement (sample)
Section 1 Description of Sponsorship or Package

The project known as _____________ ( Title, if any ) , consists of the construction of three
classroom school building , with toilet, classroom equipment including tables, chairs and
chalkboards).

Section 2 Rights and Obligations of the DepEd

a. Provide policy guidance and directions to ensure the proper implementation of the Program;
b. Coordinate with the adopting private entity in the implementation of program activities and accept
the package of assistance thru the School Division Office;
c. Assist in the evaluation of the implementation of the Program and;
d. Review and endorse the application of the adopting private entity for tax incentive entitlement to
the Revenue District Office.

Section 3 Rights and Obligations of the PROPONENT

a. The Proponent shall cause the planning and construction of a three-classroom-school building.
The infrastructure shall be built according to the dimensions specified by DepED and shall be
designed in pursuant to the building plans and architect’s perspectives hereto attached as “Annex
A”.
b. The Proponent shall be entitled to engage services of licensed architects and engineers to
prepare the plans, designs, specifications and construction drawings for the school building and
contract out the construction of the school building to duly licensed contractors;
c. The Proponent shall administer the efficient and effective implementation of the construction,
especially during the three-month-period from the commencement of construction and cause
contractors to comply with and adhere to basic safety practices in and during construction.
Likewise, the Proponent shall coordinate closely with DepEd in the implementation of program
activities;
d. Actual cost of the construction shall be paid out to contractors, suppliers and consultants by the
Proponent; and
e. A Deed of Donation in favor of DepED for the completed school building shall be executed.

Section 4 Scope of the Program or Package

The project beneficiary shall be (name of school, address)

Section 5 Program Cost\ Breakdown

The estimated construction cost of the school building is (amount)

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Memorandum of Agreement (sample)
Section 6 Term (starting term and ending term)

The School building shall be constructed during a three-month period from commencement of construction and following a timetable
which will cause the completion of construction before 2007.
Section 7 Capacity and Authorization

The parties herein warrant that they have the capacity, power and requisite authorization to enter into this Agreement

Section 8 Separability Clause

Should any part of this Agreement be judicially declared null and void, such nullity shall not affect the
validity of the remaining provisions hereof.

Section 9 Breach of Contract

The violation or omission of any of the provisions of this Agreement shall be ground for the
cancellation or rescission of the same without need for legal or court action.

SIGNED on the date and at the place first above written.

DEPARTMENT OF EDUCATION SPONSORING BODY

By By

______________________________ ___________________
Secretary President/Head

SIGNED IN THE PRESENCE OF:

_____________________________ ___________________

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Memorandum of Agreement (sample)

ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)

______________________________ ) ss.
BEFORE ME this _________(date)________-____ , personally appeared:
_____________________ CTC#_______________, Issued on/at________________
______________________CTC#______________, Issued on/at _______________

Known to me and to me known to be the same persons who executed the foregoing instrument, and
they acknowledged to me that the same is their free and voluntary act and deed and that of the
corporations herein they represented. This Memorandum of Agreement consists of ______ pages
including this page in which this acknowledgement is written, signed by the parties in their
instrumental witnesses each and every page thereof.

WITNESS MY HAND AND NOTARIAL SEAL, on the date at the place first written above.

NOTARY PUBLIC
Doc. No. ________
Page No.________
Book No._______
Series of _________

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 Deed of Donation (Sample)

DEED OF DONATION

KNOW ALL MEN BY THESE PRESENTS:

This Deed of Donation made and executed by the _______________________(donating

organization) herein represented by its______________________(title of representative)
__________________________ (name of representative) with office address at
________________________________________________,, hereinafter called the DONOR

-- in favor of –

The (name of the school) herein represented by its _____________________ SDS/Principal

______________________________________ (name of the representative) with office address at
____________________________________________________, hereinafter called the DONEE.

WITNESSETH

That for and in consideration of a desire to contribute a share for the cause of the education of
Filipino learners through the Adopt-a-School Program of the Department of Education, the DONOR has freely
and voluntarily given, transferred and conveyed by way of donation to the DONEE, its successors and assigns
free and clear of any and all liens and encumbrances whatsoever all its rights, interests and title on:
“_________________________”

Details of the Donation Amount Schools & Addresses

____________________________ __________________ ____________________________
____________________________ __________________ ____________________________
____________________________ __________________ ____________________________

TOTAL ________________

(Note: Use Annex page for more details of the donation)

IN WITNESS WHEREOF, the DONOR has hereto subscribed herself/himself this __ day of
________________, 2012.

_________________________________
(Signature over Donor’s Name)

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Deed of Donation (Sample)

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

____________________________ ) ss.

BEFORE ME this (date), personally appeared to me with

Name Details Issued on/at

___________________ _______________ ________________________

Known to me and to me known to be the same persons who executed the foregoing instrument,
and they acknowledged to me that the same is free and voluntary act and deed, including that of the entities
that they represent.

This instrument refers to a Deed of Donation that consists of ___ page, including this whereon
this acknowledgement is written, and which is signed by the parties concerned on each and every page
thereof.

WITNESS MY HAND AND NOTARIAL SEAL, on the date at the place first written above.

NOTARY PUBLIC

Doc. No. ________

Page No.________
Book No.________
Series of ________

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Deed of Acceptance (Sample)

DEED OF ACCEPTANCE
The DONEE, for and in behalf of the School, hereby accepts and acknowledges the donation from
the _______________________(Donor)

For and in behalf of the school, the DONEE expresses his/her most sincere appreciation for the
benevolence shown by the DONOR.

Details of the Donation

__________________________________________

__________________________________________

In witness whereof, the DONEE has set his/her hands this _______________________ (date) in
____________________________ (place).

_____________________________ __________________________________________
DONEE NAME OF SCHOOL / ADDRESS
(Signature over School Principal’s Name)

SIGNED IN THE PRESENCE OF:

_____________________________ _____________________________
(Signature over Printed Name)

ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)
____________________________ ) ss.

BEFORE ME this _______________(date), ____________, personally appeared:

________________________CTC# _______________ Issuedon/at _____________________
________________________CTC# _______________ Issuedon/at _____________________

Known to me and to me known to be the same persons who executed the foregoing
instrument, and they acknowledged to me that the same is free and voluntary act and deed, including
that of the entities that they represent.

This instrument refers to a Deed of Acceptance that consists of 1 page, including this
whereon this acknowledgement is written, and which is signed by the parties concerned on each
and every page thereof.

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Deed of Acceptance (Sample)

WITNESS MY HAND AND NOTARIAL SEAL, on the date at the place first written above.

NOTARY PUBLIC
Doc. No. ________
Page No.________
Book No.________
Series of ________

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Republic Act 8525

II. No. 7971

S. No. 1827

Republic of the Philippines

CONGRESS OF THE PHILIPPINES
Metro Manila

Tenth Congress.

Third Regular Session

__________________

Begun and held in Metro Manila, on Monday, the twenty-eight day of July, nineteen hundred and
ninety seven.

[REPUBLIC ACT NO. 8525]

AN ACT ESTABLISHING AN “ADOPT-A- SCHOOL PROGRAM”

PROVIDING INCENTIVES THEREFOR, AND FOR OTHER PURPOSES

Be enacted by the Senate and House of Representatives of the Philippines in Congress assembled.

SECTION 1. Title. – This Act shall be known and cited as the “Adopt-a-School Act of 1998.”

SEC. 2. Declaration of Policy. – It is the policy of the State to provide quality and relevant education
to the Filipino youth and to encourage private initiative to support public education. Towards this end,
the State shall institute programs to encourage private companies and enterprises to help in the
country, particularly those in poverty-stricken provinces.

SEC. 3. Adopt-a-School Program. – there is hereby established the “Adopt-a-School Program” which
will allow private entities to assist a public school, whether elementary, secondary, or tertiary,
preferably located in any of the twenty (20) poorest provinces identified by the Presidential Council
for Countryside Development or any other government agency tasked with identifying the poorest
provinces in, but not limited to, the following areas: staff and faculty development for training and
further education, construction facilities, upgrading of existing facilities, provision of books,
publications and other instructional materials; and modernization of instructional technologies.

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Republic Act 8525

A Memorandum of Agreement (MOA) specifying the details of the adoption shall be entered into
between the adopting entity and the head of the school concerned: Provided, that such MOA shall be
subject to review and approval of the Superintendent of Schools of the province or district concerned:
Provided, further, That the agreement shall last for at least two (2) years with the possibility of
extension: Provided, finally, That such period may be shortened only in cases where the adopting
entity is dissolved before the end of such period unless otherwise earlier terminated in accordance
with the succeeding section.

SEC. 4. Periodic Review. – A review of the adoption shall be undertaken by the local school board of
the province or city where the school is located. The standards and guidelines for the review shall be
formulated by the Coordinating Council created under Section 7 hereof. The results of the review
shall be taken into consideration in the assessment of the application for tax credits by the adopting
entity. The school board may, after an appropriate review, recommend to the Coordinating Council
the termination of the adoption. The adopting entity may appeal the assessment to the Coordinating
Council whose decision shall be final and unappeasable.

SEC. 5. Additional Deduction of Expenses Incurred for the Adoption. – Provision of existing laws to
the contrary notwithstanding, expenses incurred by the adopting entity for the “Adopt-a-School
Program” shall be allowed an additional deduction from the gross income equivalent to fifty percent
(50%) of such expenses.

Valuation of assistance other than money shall be based on the acquisition cost of the property. Such
valuation shall take into consideration the depreciated value of the property in case said property has
already been used.

SEC. 6. Additional incentives. – The adopting company or enterprise, in addition to the incentive
provided in the preceding section shall be entitled to have its name emblazoned beneath the name
of the school after words indicating that the school is under the “Adopt-a-School Program”. Moreover,
the adopting entity shall be represented in the local school board of the municipality where the
adopted elementary or high school is located.

SEC. 7. Coordinating Council. – A Coordinating Council, hereinafter referred to as the Council, is

hereby created to coordinate and monitor the implementation of this Act. The Council shall be
composed of the Secretary of the Department of Education, Culture and Sports (DECS) as
chairperson; the Chairman of the Commission on Higher Education (CHED) and the Director-General
of Technical Education and Skills Development Authority (TESDA), as co-chairpersons; and the
chairperson of the Presidential Council for Countryside Development (PCCD), and the representative
from the National Federation of Chambers of Commerce and Industry (NFCCI) to be appointed by
the President of the Philippines, as members.

The Council shall meet once every three (3) months. The chairpersons and members shall not receive
compensation but shall be entitled to reimbursements for reasonable expenses related to the
Council’s activities.

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Republic Act 8525
The DECS, CHED, and TESDA, through a mutual agreement, shall each make provisions for the
Secretariat of the Council.

SEC. 8. Rules and Regulations. – The DECS, CHED and TESDA, in consultation with the
Department of Finance, shall formulate the rules and regulations to implement this Act.

SEC. 9. Separability Clause. – In the event that any provision of this Act is declared unconstitutional,
the validity of the other provisions shall not be affected by such declaration.

SEC. 10. Repealing Clause. – All laws, decrees, orders, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 11. Effectivity. – This Act shall take effect fifteen (15) days after its publication in two (2)
national newspapers of general circulation.

Approved.

(SGD.) NEPTALI A. GONZALES (SGD.) JOSE DE VENECIA JR.

President of the Senate Speaker of the House of Representatives

This Act which originated in the House of Representatives was finally passed by the House of
Representatives and the Senate on February 6, 1998.

(SGD.) HEZEL P. GACUTAN SGD.) ROBERTO P. NAZARENO

Secretary of the Senate Secretary General
House of Representatives

Approved:
FEB. 14, 1998

(SGD.) FIDEL V. RAMOS

President of the Philippines

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BIR Revenue Regulations 10-2003
BIR REVENUE REGULATIONS

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
Quezon City

January 27, 2003

REVENUE REGULATIONS NO. 10-2003

SUBJECT: Implementing the Tax Incentives Provisions of Republic Act No. 8525, Otherwise Known
as the “Adopt-a-School Act of 1998”

TO : All Internal Revenue Officers and Others Concerned.

SECTION I. SCOPE. – Pursuant to Sections 4 and 244 of the National Internal Revenue Code (Tax
Code) of 1997, the following Regulations are hereby promulgated to implement the tax provisions of
R.A. No. 8525, otherwise known as the “Adopt-a-School Act of 1998.”

SEC. 2. DEFINITION OF TERMS. – For purposes of these Regulations, the following terms are
operationally defined as follows:

(a) “Act”-refers to Republic Act No. 8525, otherwise known as the “Adopt-a-School Act of 1998.”

(b) “Adopt-a-School Program” – or “Program” shall refer to a program which allows private entities to
assist a public school in a particular aspect of its educational program within an agreed period.

(c) “Public school” – shall refer to a government school, whether elementary, secondary, post-
secondary or tertiary, which enters into an Agreement with an adopting private entity concerning
assistance referred to under paragraph (e) hereof.

(d) “Private entity” – shall refer to an individual engaged in trade or business or engaged in the practice
of his profession or other business organizations, like a partnership, corporation or cooperative, either
resident or non-resident, who/which teams up with the Department of Education (DepEd), or with the
Commission on Higher Education (CHED), or with the Technical Education and Skills Development
Authority (TESDA), towards providing much needed assistance and service to public schools. It shall
be known hereafter as the adopting private entity.

(e) “Assistance” – shall refer to the aid/help/ contribution/donation provided by an adopting private
entity to a public school. Assistance may in the form of, but not limited to, in infrastructure, teaching
and skills development, learning support, computer and science laboratories, and food and nutrition.

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BIR Revenue Regulations 10-2003
(f) “Agreement” – shall refer to a Memorandum of Agreement (MOA) or Agreement/Deed of Donation
entered into by and between the adopting private entity and the public school specifying the terms
and conditions of the adoption, including the tasks and responsibilities of the contracting parties.

(g) “National Secretariat” – shall refer to the office composed of representatives of the three education
agencies, namely the DepEd, CHED, and TESDA, which will provide overall management and
coordination of the Program.

(h) “Application for tax incentives or tax exemption” – shall refer to the application for tax credit by the
adopting private entity referred to under Section 4 of the Act, which means application for additional
deduction in arriving at the net taxable income.

SEC. 3. TAX INCENTIVES ACCRUING TO THE ADOPTING PRIVATE ENTITY. – A pre-qualified

adopting private entity, which enters into an Agreement with a public school, shall be entitled to the
following tax incentives:

(a) Deduction from the gross income of the amount of contribution/donation that were actually, directly
and exclusively incurred for the Program, subject to limitations, conditions and rules set forth in
Section 34(H) of the Tax Code plus and additional amount equivalent to fifty percent (50%) of such
contribution/donation subject to the following conditions:

(1) That the deduction shall be availed of in the taxable year in which the expenses have been paid
or incurred;

(2) That the taxpayer can substantiate the deduction with sufficient evidence, such as official receipts
or delivery receipts and other adequate records-

(2.1) The amount of expenses being claimed as deduction;

(2.2) The direct connection or relation of the expenses to the adopting private provide a list of subjects
and/or activities undertaken and the cost of each undertaking, indicating in particular where and how
the assistance has been utilized as supported by the Agreement; and

(2.3) Proof or acknowledgement of receipt of the contributed/donated property by the recipient public
school.

(3) That the application, together with the approved Agreement endorsed by the National Secretariat,
shall be fi led with the Revenue District Office (RDO) having jurisdiction over the place of business of
the donor/adopting private entity, copy furnished the RDO having jurisdiction over the property, if the
contribution/donation is in the form of real property.

(b) Exemption of the Assistance made by the donor from payment of donor’s tax pursuant to Sections
101 (A)(2) and (B)(1) of the Tax Code of 1997.

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BIR Revenue Regulations 10-2003
SEC. 4. OTHER TAX CONSEQUENCES OF THE ASSISTANCE TO THE PUBLIC SCHOOL.

(a) In the case of foreign donation, the VAT and excise tax, if any, on the importation of goods shall
be assumed by the DepEd, CHED, or the importer thereof, except in cases where the importation is
exempt from VAT under Section 109 of the Tax Code. In this connection, VAT on importation payable
by the concerned national government agency namely, (DepEd, CHED, or TESDA) to the National
Government arising from the subject foreign donation is deemed automatically appropriated and shall
be considered as expenditure of the government pursuant to the provisions of Section 13 of the
Government Appropriation Act (GAA) as determined by the Congress on an annual basis.

(b) In the case of local donation considered as “transaction deemed sale” of goods or properties
originally intended for sale by the adopting private entity, the same shall be subject to VAT on the
transfer of the said goods or properties under Section 106 (B)(1) of the Tax Code. The said
donor/adopting private entity, however, is entitled to claim the availment input tax subject to the rules
on allocation among taxable sales, zero-rated sales and exempt sales. On the other hand, the donee-
public school, shall be deemed as the final consumer/end user, and therefore, not entitled to any input
VAT.

If the local donation is not considered as a “transaction deemed sale”, then the transfer of he goods
or properties to the public school shall be exempt from VAT.

SEC. 5. VALUATION OF THE ASSISTANCE/ CONTRIBUTION OR DONATION.-

(a) Cash assistance/contribution or donation.- The amount of assistance /contribution or donation
shall be based on the actual amount contributed/donated appearing in the official receipt issued by
the donee.

(b) Assistance/contribution or donation other than money.-

(i) Personal property. – If the contribution or donation is in the form of personal property, the amount
of contribution or donation shall be based on the acquisition cost of the said assistance or contribution.
However, if the said property had already been used, then such valuation such take into consideration
the depreciated value of the property.

(ii) Consumable goods.– If the assistance is in the form of consumable goods, the amount of the
contribution or donation shall be based on the acquisition cost by the donor or the actual cost thereof
at the time of the donation, whichever is lower.

(iii)Services. – If the assistance is in the form of services, the amount of the contribution of donation
shall be based on the value of the services rendered as agreed upon by the donor and the service
provider and the public school as fixed in the Memorandum of Agreement, or the actual expenses
incurred by the donor, whichever is lower.

(iv) Real property. – If these assistance is in the form of real property, the amount of the contribution
or donation shall be the fair market value of the property at the time of the contribution/donation, as
determined pursuant to Section 6(E) of the Tax Code or the book

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BIR Revenue Regulations 10-2003
value/depreciated value of the property, whichever is lower. Appraisal increase or appreciation in the
value of the asset recorded in the books of account should not be considered in computing the book
value of the asset.

SEC. 6. PROCEDURES FOR THE AVAILMENT OF TAX INCENTIVES UNDER THE PROGRAM BY
THE ADOPTING ENTITY. – In order to avail of the tax incentives provided for under these
Regulations, the following procedures and requirements should be complied with, viz:

(a) National Secretariat shall endorse to the RDO of the Bureau of Internal Revenue (BIR) having
jurisdiction over the place of business of the adopting private entity, copy furnished the RDO having
jurisdiction over the property if the donation or contribution is in the form of real property, the following:

(i) duly notarized/approved Agreement;

(ii) duly notarized Deed of Donation;
(iii) Official receipts or any document showing the actual value of the contribution/donation;
(iv) Certificate of Title and Tax declaration, if the donation is in the form of real property; and

(v) other adequate records showing the direct connection or relation of the expenses being claimed
as deduction/donation to the adopting private entity’s participation in the program, as well as showing
or proving receipt of the donated property.

(b) Adopting private entity shall submit application for entitlement to the additional 50% special
deduction from the gross income, and for exemption from donor’s tax to the RDO having jurisdiction
over the place of business of the adopting private entity, copy furnished the RDO having jurisdiction
over the donated real property.

SEC. 7. REPEALING CLAUSE. – All revenue rules and regulations, and other revenue issuances or
parts thereof, which are inconsistent with these Regulations are hereby repealed or modified
accordingly.

SEC. 8. EFFECTIVITY. – These regulations shall take effect fifteen (15) days after publication in the
Official Gazette or in a newspaper of general circulation, whichever comes first.

(SGD.) JOSE ISIDRO N. CAMACHO

Secretary of Finance

Recommending approval:

(SGD.) GUILLERMO L. PARAYNO, JR.

Commissioner of Internal Revenue

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 Tax incentives
In recognition of the goodwill that private sector partners provide to the Philippines public education
system, they can avail of up to 150% tax incentives for their contributions through the Adopt-A-School
Program (ASP). The ASP Secretariat assists these partners by facilitating endorsements for tax
incentives application from the ASP Council which will then be submitted to the Bureau of Internal
Revenue (BIR).

A. Below are the required documents and work-flow for tax incentives:

1. Letter of request to avail tax incentives

2. Duly notarized signed Memorandum of Agreement (must be signed before project
implementation)
3. Duly notarized Deed of Donation
4. Duly notarized Deed of Acceptance
5. Name of the Recipient School/s
6. Summary of Expenses
7. Official Receipts or any documents showing actual expenses incurred for the project /
actual value of donation
8. Cost of Goods donated
9. Certificate of Title and Tax Declaration – Real Property
10. Endorsement from the ASP National Secretariat (signed by members of the ASP Council
and facilitated by the ASP National Secretariat)

B. Below is the process flow for tax incentives:

Project Development
Submission of requirements for tax incentive endorsement
(January 31)

Memorandum of Agreement
(for multiple projects, a Submission of endorsement request with completed
Memorandum of requirements to ASP Council Members (DepEd, CHED,
Understanding TESDA) for approval and signing

Endorsement request review and approval

Project Implementation
Filing of income tax return with approved endorsement and
other documents to BIR RDO by private sector partner (April
Project Monitoring and 15)
Evaluation

Review and Approval of tax incentive claim by BIR

Tax incentive application

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