Donation laws are created with the aim of encouraging the free transfer of funds to a person or an organization with legal personality . Through donation laws, the State invites community members to collaborate on various causes by offering an incentive to those who do so.
This mechanism is effective to the extent that it grants tax benefits to donors. To qualify for this benefit, a donation certificate must be available. However, there are currently 26 donation laws and each one has its own requirements.
A new law called the Public Benefit Donations Act was recently passed, which expands the types of organizations that can receive donations, including those dedicated to health and environmental issues, and also allows for monetary and in-kind donations. NOTE! This law has not yet been enacted, but we hope that in about three months it will be ready for use.
Here we summarize what it is about:
The unanimous approval of this new law by Congress demonstrates how the contribution of civil society is increasingly valued by the public sector.
Historically, the largest donations have come from investment companies, philippine pie telegram which have many obstacles to making them, since under the current system, if you have a company and you want to use the funds from it to reinvest them in the same company, you do not pay income tax. However, if you want to withdraw funds to donate them, you have to face paying a disallowed expense that can reach 40% of the donation and also a donation tax of up to 35%.
The most important thing that is being achieved with this law is that the penalty for such donations is significantly lifted, facilitating the transfer of funds from where they are saved to causes of public benefit. In addition, it opens up donations in cash and in kind and also clarifies the functioning of donations from abroad.
A major advance of this law is that it broadens the purposes for which donations can be made. All matters of public good are included (list attached). Anything not explicitly included can be considered as part of the last point:
Social, community and urban development.
Health, education, science, culture and sport.
Environment.
Worship.
Gender and human rights.
Child and family protection.
Native peoples.
Migrants.
Diversity and non-discrimination.
Strengthening democracy.
Disasters and firefighters.
International aid.
Animal protection.
Another general interest established by the Ministry of Finance.
In addition, the possibility is opened to all types of people or taxpayers to donate, with some minor exceptions. Also, the goods received as donations can be sold as long as the funds are used to fulfill the public benefit, among other things.
Does this law replace existing ones?
The new law does not replace the existing laws, which are still in force. For this reason, we leave you a blog that talks about two very important laws, the Municipal Income Law and the Social Funds Law:
In addition, we provide you with a bibliography from the SII where you can review more information about donations.