REPORTER: SAM JEAN SATAM
SECTION 34 (F): DEPRECIATION
GENERAL RULE [Sec. 34 (F)(1)]
There shall be allowed as a depreciation deduction a reasonable allowance for the exhaustion,
wear and tear (including reasonable allowance for obsolescence) of property used in the trade or
business. In the case of property held by one person for life with remainder to another person, the
deduction shall be apportioned between the income beneficiaries and the trustees in accordance with
the pertinent provisions of the instrument creating the trust, or in the absence of such provisions, on
the basis of the trust income allowable to each.
EXPLANATION:
This provision allows businesses to deduct depreciation on property used in operations. In trusts, the
deduction is split between income beneficiaries and trustees per the trust document; if not specified,
it’s divided based on their income entitlements.
Depreciation expense as a deduction from the gross income refer to a reasonable allowance for the
exhaustion, wear and tear and normal obsolescence of tangible property used in the trade or business.
It pertains to the gradual diminution in the useful value of tangible property resulting from ordinary
wear and tear and from normal obsolescence. The term is also applied to amortization of the value of
intangible assets the use of which in the trade or business is definitely limited in duration.
EXPLANATION:
Depreciation is a deductible expense that accounts for the gradual loss of value of tangible assets
due to wear, tear, and obsolescence. It also applies to the amortization of intangible assets with a
limited useful life.
Requisites for Deductibility:
There are a few requisites to claim depreciation as a deduction, the following conditions must be
met:
1. The depreciation must be reasonable.
2. The asset must be used in trade or business.
3. The depreciation must be recorded properly.
4. A schedule of the allowance must be attached to the tax return.
Methods of Depreciation:
Next are the following depreciation methods as allowed by our tax code. So, the following methods
may be used to allocate the property's cost.
The first one is the Straight-Line Method
EXPLANATION:
This is the most common depreciation method used in taxation. This is the default or the universal
method being used by any taxpayer, whether an individual or corporate taxpayer.
Second is the Declining-Balance Method
EXPLANATION:
The Declining-Balance Method accelerates depreciation by applying a fixed percentage to an
asset’s book value, resulting in higher expenses initially. It is typically used for quickly depreciating
assets and may need adjustments in the final year for full depreciation.
Third is the Sum-of-the-Years-Digit Method
EXPLANATION:
The Sum-of-the-Years-Digits (SYD) method speeds up depreciation by assigning higher expenses in
the early years of an asset's life, reflecting its faster decline in value. It calculates the total years of
the asset's lifespan and uses decreasing fractions, making it ideal for assets that depreciate
quickly.
Lastly is any method prescribed by the Secretary of Finance upon the Commissioner's
recommendation.
Just in case:
FORMULAS:
Ref: Valix, Conrado T., Peralta, Jose F., Valix, Christian Aris M. Intermediate accounting 1. 3rd
edition. Metro Manila, Philippines. GIC Enterprises & Co., Inc., 2017. 752-755 p.
Depreciation of Motor Vehicles (RR 12-2012)
RR 12-2012 issued on October 12, 2012 prescribes the rules on the deductibility of depreciation
expenses as it relates to purchase of vehicles and other expenses related thereto, and input taxes
allowed therefor, to wit:
1. No deduction from gross income for depreciation shall be allowed unless the taxpayer
substantiates the purchase with sufficient evidence, such as official receipts or other adequate
records which contain the following, among others:
a. Specific Motor Vehicle Identification Number, Chassis Number or other registrable
identification numbers of the vehicle;
b. The total price of the specific vehicle subject to depreciation; and
c. The direct connection or relation of the vehicle to the development, management,
operation and/or conduct of the trade or business or profession of the taxpayers.
2. Only one vehicle for land transport is allowed for the use of an official or employee the value
of which should not exceed Two Million Four Hundred Thousand Pesos (Php 2,400,000.00);
3. No depreciation shall be allowed for yachts, helicopters, airplanes and/or aircrafts and land
vehicles which exceed the above threshold amount, unless the taxpayer’s main line of business
is transport operation or lease of transportation equipment and the vehicles purchased are
used in said operations;
4. All maintenance expenses on account of non-depreciable vehicles for taxation purposes are
disallowed in its entirely;
5. The input taxes on the purchase of non-depreciable vehicles and all input taxes on
maintenance expenses incurred thereon are likewise disallowed for taxation purpose.
EXPLANATION:
This governs the deductibility of depreciation for vehicle purchases, related expenses, and input
taxes. It sets limits on deductible depreciation for passenger vehicles and disallows input taxes on
non-deductible expenses. It is not automatically presumed that the purchase of vehicles is directly
related to or used in the business.
Depreciation of Properties Used in Petroleum Operations
An allowance for depreciation in respect of all properties directly related to production of
petroleum initially placed in service in a taxable year shall be allowed under the straight-line or
declining-balance method of depreciation at the option of the service contractor. However, if the
service contractor initially elects the declining-balance method, it may at any subsequent date, shift to
the straight-line method.
The useful life of properties used in or related to production of petroleum shall be ten (10)
years or such shorter life as may be permitted by the Commissioner. Properties not used directly in the
production of petroleum shall be depreciated under the straight-line method on the basis of an
estimated useful life of five (5) years.
EXPLANATION:
So, petroleum operation means the exploration, production, storage, transport, sale, or disposal
of petroleum. So, these are the businesses or taxpayers engaged in the exploration and
production of petroleum.
For petroleum-related properties, service contractors can choose between straight-line or
declining-balance depreciation. They can later switch to straight-line if they started with declining-
balance. These assets are usually depreciated over 10 years, while non-production assets are
straight-line depreciated over 5 years.
DEPRECIATION OF MINING OPERATIONS [Sec. 34(F)(5)]
An allowance for depreciation in respect of all properties used in mining operations other than
petroleum operations, shall be computed as follows:
a. At the normal rate of depreciation if the expected life is ten (10) years or less; or
b. Depreciated over any number of years between five (5) years and the expected life if the
latter is more than ten (10) years, and the depreciation thereon allowed as deduction from
taxable income: Provided, That the contractor notifies the Commissioner at the beginning
of the depreciation period which depreciation rate allowed by this Section will be used.
EXPLANATION:
For mining (excluding petroleum), depreciation is allowed at the normal rate if the asset’s life is 10
years or less. If it exceeds 10 years, it can be spread over 5 years or more, up to its expected life, as
long as the contractor informs the Commissioner at the start.
EXAMPLE:
A mining company acquires a drilling machine with a 15-year lifespan. It can depreciate the
machine over any period between 5 and 15 years. If it chooses 10 years, the annual depreciation
expense is calculated accordingly and deducted from taxable income.
DEPRECIATION DEDUCTIBLE BY NON-RESIDENT ALIENS ENGAGED IN TRADE OR BUSINESS OR
RESIDENT FOREIGN CORPORATIONS [Sec. 34(F)(6)]
In the case of a non-resident alien individual engaged in trade or business or resident foreign
corporation, a reasonable allowance for the deterioration of property arising out of its use or
employment or its non-use in the business, trade or profession shall be permitted only when such
property is located in the Philippines.
EXPLANATION:
Non-resident aliens and resident foreign corporations can claim depreciation only for property
located in the Philippines, accounting for wear and tear from use or non-use in business.
Section 34(G) of the Tax Code, as amended
DEPLETION OF OIL AND GAS WELLS AND MINES
IN GENERAL [Sec. 34(G)(1)]
In the case of oil and gas wells or mines, a reasonable allowance for depletion or amortization
computed in accordance with the cost-depletion method shall be granted under rules and regulations
to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner. Provided,
That when the allowance for depletion shall equal the capital invested no further allowance shall be
granted: Provided, further, That after production in commercial quantities has commenced, certain
intangible exploration and development drilling costs: (a) shall be deductible in the year incurred if such
expenditures are incurred for non-producing wells and/or mines , or (b) shall be deductible in full in the
year paid or incurred or, at the election of the taxpayer, may be capitalized and amortized if such
expenditures incurred are for producing wells and/or mines in the same contract area.
Any intangible exploration, drilling and development expenses allowed as a deduction in
computing taxable income during the year shall not be taken into consideration in computing the
adjusted cost basis.
What is depletion?
- it an allocation of the cost or other basis of a wasting asset over the period the natural resource is
extracted or produced.
Wasting assets
- are physically consumable and irreplaceable. It usually includes coal, oil, ore, timber and precious
metals like gold and silver.
EXPLANATION:
For oil, gas, or mining operations, a depletion allowance using the cost-depletion method is
permitted until it equals the invested capital. Intangible exploration and drilling costs are
deductible in the year incurred for non-producing wells, and for producing wells, they can be fully
deducted or capitalized and amortized. Deductions claimed can’t be added to the asset’s cost
basis.
DEPLETION
Depletion pertains to exhaustion of natural resources due
to production that is allowed as deduction to recover cost
of the property or wasting asset. Exploration expenditures
Depletion of Oil and Gas wells and mines
are those incurred for the purpose of ascertaining the
deductible by a non-resident alien or
existence, location, extent, or quality of any deposit of foreign corporation only in respect of oil
ore/other mineral and paid or incurred before the and gas wells or mines located in the
beginning of the development stage of the mine or Philippines.
deposit. On the other hand, Development expenditures
are those paid or incurred during development stage of
the mine or other natural deposits.
EXPLANATION:
Depletion allows businesses to deduct the cost of natural resource exhaustion. Exploration costs
cover assessing mineral deposits before development, while development costs occur during the
mine’s development stage. Non-resident aliens and foreign corporations can only claim depletion
for oil, gas, and mines in the Philippines.
Intangible costs in petroleum operations refers to any cost incurred in petroleum operations
which in itself has no salvage value and which is incidental to and necessary for the drilling of wells
and preparation of wells for the production of petroleum: Provided, That said costs shall not pertain
to the acquisition or improvement of property of a character subject to the allowance for depreciation
except that the allowances for depreciation on such property shall be deductible under Sec. 34(G)(1).
EXPLANATION:
Intangible costs in petroleum operations refer to expenses related to the drilling and preparation of
wells for petroleum production, which do not have any salvage value. These costs are essential to
the process but cannot be recovered through depreciation. However, depreciation on properties
related to these operations can still be deducted separately under specific tax provisions.
ELECTION TO DEDUCT EXPLORATION AND DEVELOPMENT EXPENDITURES [Sec. 34(G)(2)]
In computing taxable income from mining operations, the taxpayer may, at his option, deduct
exploration and development expenditures accumulated as cost or adjusted basis for cost depletion
as of date of prospecting, as well as exploration and development expenditures paid or incurred during
taxable year: Provided, That the amount deductible for exploration and development expenditures
shall not exceed twenty-five percent (25%) of the net income from mining operations computed
without the benefit of any tax incentives under existing laws. The actual exploration and development
expenditures minus twenty-five (25%) of the net income from mining shall be carried forward to the
succeeding years until fully deducted. The election by the taxpayer to deduct the exploration and
development expenditures is irrevocable and shall be binding in succeeding taxable years.
EXPLANATION:
In mining operations, taxpayers can choose to deduct exploration and development expenditures,
including both accumulated costs and those incurred during the taxable year. However, the
deductible amount cannot exceed 25% of the net income from mining, excluding tax incentives.
Any amount exceeding this limit can be carried forward to future years until fully deducted. Once
the taxpayer elects to deduct these expenditures, the decision is final and applies in subsequent
years.
Net income from mining operations, shall mean gross income from operations less allowable
deductions which are necessary or related to mining operations. Allowable deductions shall include
mining, milling and marketing expenses, and depreciation of properties directly used in the mining
operations. This paragraph shall not apply to expenditures for the acquisition or improvement of
property of a character which is subject to the allowance for depreciation. In no case shall this
paragraph apply with respect to amounts paid or incurred for the exploration and development of oil
and gas.
EXPLANATION:
Net income from mining operations is calculated by deducting allowable expenses from gross
income. These deductions include mining, milling, marketing expenses, and depreciation of assets
directly used in mining. However, costs for acquiring or improving depreciable property are
excluded. Additionally, this provision does not apply to exploration and development expenses for
oil and gas operations.
The term exploration expenditures mean expenditures paid or incurred for the purposes of
ascertaining the existence, location, extent or quality of any deposit of ore or other mineral, and paid
or incurred before the beginning of the development stage of the mine or deposit. The term
development expenditures mean expenditures paid or incurred during the development stage of the
mine or other natural deposits. The development stage of a mine or other natural deposit shall begin
at the time when deposits of ore or other minerals are shown to exists in sufficient commercial
quantity and quality and shall end upon commencement of actual commercial extraction.
EXPLANATION:
Exploration expenditures refer to costs incurred to determine the existence, location, and quality
of mineral deposits before the development stage begins. Development expenditures are incurred
during the development stage, which starts when commercially viable deposits are confirmed and
ends when actual extraction begins. These expenses are essential for assessing and preparing
mining sites for production.
DEPLETION OF OIL AND GAS WELLS AND MINES DEDUCTIBLE BY A NON-RESIDENT ALIEN INDIVIDUAL
OR FOREIGN CORPORATION [Sec.34(G)(3)]
In the case of a non-resident alien individual engaged in trade or business in the Philippines or
a resident foreign corporation, allowance for depletion of oil and gas wells or mines shall be authorized
only in respect to oil and gas wells or mines located within the Philippines.
EXPLANATION:
Non-resident aliens and resident foreign corporations can claim a depletion allowance under
Section 34(G)(3) only for oil and gas wells or mines in the Philippines. This limits deductions to
resources extracted within the country's jurisdiction.
OIL AND GAS WELLS AND MINES CONVERTED INTO INVENTORIES
There shall be no reduction of cost or value of natural resources such as oil and gas wells, and
mines as the resources are converted into inventories. No further allowance is granted if the allowance
for depletion is equal to the capital invested. Intangible exploration and development drilling costs
may be:
▪ For non-producing wells and mines – Deducted in the year the costs were incurred.
▪ For producing wells and mines – Deduct in full or capitalized and amortize.
EXPLANATION:
The cost or value of natural resources, such as oil and gas wells and mines, remains unchanged when
converted into inventories. Once the depletion allowance equals the capital invested, no further
deductions are allowed. Intangible exploration and development costs can be:
• For non-producing wells and mines: Deducted in the year incurred.
• For producing wells and mines: Either fully deducted or capitalized and amortized.
AMORTIZATION OF GOODWILL
Amortization for goodwill is not allowed as deduction from gross income. While intangibles
maybe allowed to be amortized, it is only allowed to those intangibles whose use in the business or
trade is definitely limited in duration. (Basilan Estates, Inc. v, CIR, 21 SCRA 17). Such is not the case with
goodwill.
EXPLANATION:
Goodwill amortization is not allowed as a deduction from gross income. While some intangible
assets can be amortized, this applies only to those with a definite useful life. Since goodwill does not
have a fixed duration, it is not eligible for amortization, as upheld in Basilan Estates, Inc. v. CIR, 21
SCRA 17.
ABANDONMENT LOSSES
If contract area where petroleum operations are undertaken is partially or wholly abandoned,
all accumulated exploration and development expenditures pertaining to contract area shall be
allowed as a deduction. If producing well is subsequently abandoned, the unamortized costs, as well
as the undepreciated costs of equipment directly used, shall be allowed as deduction in the year such
well, equipment or facility is abandoned.
EXPLANATION:
When a petroleum contract area is abandoned, all exploration and development costs can be
deducted. If a producing well is abandoned, any remaining exploration and equipment costs can
also be deducted in that year, allowing for recovery of investment losses.
Section 34 (H) of the Tax Code, as amended
CHARITABLE AND OTHER CONTRIBUTIONS
IN GENERAL [SEC. 34(H)(1)]
Contributions or gifts actually paid or made within the taxable year to, or for the use of the
Government of the Philippines or any of its agencies or any political subdivision thereof exclusively for
public purposes, or to accredited domestic corporations or associations organized and operated
exclusively for religious, charitable, scientific, youth and sports development, cultural or educational
purposes or for the rehabilitation of veterans, or to social welfare institutions, or to nongovernment
organizations, in accordance with rules and regulations promulgated by the Secretary of Finance, upon
recommendation of the Commissioner, no part of the net income of which inures to the benefit of any
private stockholder or individual in an amount not in excess of ten percent (10%) in the case of an
individual, and five percent (5%) in the case of a corporation, of the taxpayer’s taxable income derived
from trade, business or profession as computed without the benefit of this and the following
subparagraphs.
Contributions deductible from gross income may be deductible in full or subject to limitation
depending upon the organization to which the donation is given (Refer to Table 9-4 provided below).
The amount of any contribution of property other than money shall be based on the acquisition of
said property [Sec 34 (H) Tax Code].
REQUISITES FOR DEDUCTIBILITY:
1) The contribution or gift must be actually paid
2) It must be given to organization specified by law
3) It must be within the taxable year
4) The net income of the institution must not inure to the benefit of any private individual or
shareholder.
5) The taxpayer claiming the deduction must be engaged in trade, practice of profession or
business.
EXPLANATION:
Under Section 34(H) of the Tax Code, charitable contributions made within the taxable year can be
deducted from gross income, provided they meet certain conditions. Donations must go to the
Philippine government or accredited organizations involved in religious, charitable, scientific,
cultural, educational, or social welfare activities, with no benefit to private individuals.
Deductions are limited to 10% of taxable income for individuals and 5% for corporations, unless
the donation qualifies for full deductibility. Contributions in non-monetary form are valued at their
acquisition cost.
Requisites for Deductibility:
1. Contribution must be actually paid.
2. Given to qualified organizations as specified by law.
3. Made within the taxable year.
4. The recipient’s net income must not benefit any private individual or shareholder.
5. The taxpayer must be engaged in trade, business, or profession.
TABLE 9-4:
CONTRIBUTIONS DEDUCTIBLE IN FULL and SUBJECT TO LIMITATIONS
DEDUCTIBLE IN FULL SUBJECT TO LIMITATIONS
1. [Sec. 34(H)(2)(a)] Donations to the 1. Donations to the government of the
government of the Philippines, any of its Philippines or political subdivisions for
agencies or political subdivisions or fully owned exclusively public purposes.
government corporations to be used exclusively ▪ The purpose of the donation is not for
in undertaking priority activities in: the priority activities of the government
▪ Education as determined by NEDA
▪ Health
▪ Youth and Sports development
▪ Human settlements
▪ Science and culture
Economic development
The Priority Plan must be determined by
the National Economic Development Authority
(NEDA), in consultation with appropriate
government agencies, including its regional
development councils and private philanthropic
persons and institutions. Hence, contributions
made to the grantees above which is/are not
made in accordance with the said annual
priority plan shall be subject to limitations.
EXPLANATION:
Donations to the Philippine government, its agencies, or fully owned government corporations are
fully deductible if used for priority activities in education, health, youth and sports development,
human settlements, science and culture, and economic development, as determined by NEDA.
Donations for public purposes that do not align with NEDA’s priority plan are still deductible but
subject to limitations. To maximize tax benefits, donors should ensure their contributions comply
with the priority plan or consult tax authorities before making donations.
DEDUCTIBLE IN FULL SUBJECT TO LIMITATIONS
2. [Sec 34(H)(2)(b)] Donations to certain foreign 2. Donations to domestic corporations or
institutions or international organizations in associations organized and operated exclusively
compliance with agreements, treaties or special for the following purposes:
law. ▪ Religious
▪ Charitable
▪ Scientific
▪ Youth and sports development
▪ Cultural
▪ Educational purpose
▪ Rehabilitation of veterans
▪ Social welfare institutions
EXPLANATION:
Donations to the Philippine government and its agencies are fully deductible if used for priority
activities set by NEDA. Donations to foreign institutions or international organizations are also fully
deductible if aligned with agreements, treaties, or special laws.
Donations for public purposes outside NEDA’s priority plan and contributions to domestic
organizations for religious, charitable, scientific, cultural, educational, or social welfare purposes are
deductible but subject to limitations. To ensure maximum tax benefits, donors should check
compliance with relevant laws or consult tax authorities.
DEDUCTIBLE IN FULL SUBJECT TO LIMITATIONS
3. [Sec 34(H)(2)(c)] Donations to Accredited 3. Accredited NGOs if the requisites for full
Non-government Organizations (NGOs) which deduction are not complied with.
are non-profit domestic corporations organized
exclusively for:
▪ Scientific research LIMIT OR ALLOWABLE DEDUCTION:
▪ Educational ▪ Individual taxpayer – 10% of taxable
▪ Character building income derived from trade, business or
▪ Youth and sports development profession before deducting the
▪ Health contribution
▪ Social welfare
▪ Cultural ▪ Corporate taxpayer – 5% of taxable
▪ Charitable purposes; or income derived from trade, business or
▪ Combination thereof profession before deducting the
Provided: contribution
▪ No part of the net income of above
accredited NGOs must inure to the
benefit of any private individual.
▪ The donation must be utilized not
later than the 15th day of the 3rd
month following the close of its
taxable year.
▪ The administrative expense must
conform with the rules and
regulations to be prescribed by the
Secretary of Finance, upon
recommendation of the
Commissioner, but in no case to
exceed 30% of the total expenses.
▪ The assets of which, in the event of
dissolution, would be distributed to:
i. Another domestic corporation
organized for similar purpose or
purposes; or
ii. The state for public purposes;
or
iii. Another organization to be used in such
manner as in the judgement of the court shall
best accomplish the general purpose for which
the dissolved organization was organized.
EXPLANATION:
DEDUCTIBLE IN FULL
Donations to the Philippine government and its agencies are fully deductible if used for priority
Donations to accredited NGOs are fully deductible if the recipient organization is a non-profit
domestic corporation operating exclusively for the following purposes:
• Scientific research
• Educational initiatives
• Character building
• Youth and sports development
• Health services
• Social welfare programs
• Cultural development
• Charitable activities
• Any combination of the above
Conditions for Full Deduction:
1. No part of the net income of the accredited NGO should benefit any private individual.
2. Donations must be utilized by the NGO no later than the 15th day of the third month
following the close of its taxable year.
3. The NGO’s administrative expenses must conform to prescribed rules and must not exceed
30% of total expenses.
4. In the event of dissolution, the NGO’s assets should be distributed to:
o Another domestic corporation with a similar purpose,
o The state for public purposes, or
o Another organization as determined by a court to best fulfill the original objectives
of the dissolved NGO.
Donations Subject to Limitations
If the requisites are not fully complied with, donations to accredited NGOs are still deductible but
will be subject to limitations:
• For individual taxpayers: Deduction is limited to 10% of taxable income derived from trade,
business, or profession before deducting the contribution.
• For corporate taxpayers: Deduction is limited to 5% of taxable income derived from trade,
business, or profession before deducting the contribution.
ILLUSTRATION:
10.13
A domestic corporation has the following data on income and expenses:
Gross business income ₱ 6,200,000
Operating expenses including SSS and Philhealth contributions 2,500,000
of ₱ 150,000
Contributions to Government for priority project in education 100,000
Contribution to a foreign private foundation 100,000
Contribution to a domestic charitable organization 190,000
REQUIRED: Determine the taxpayer’s taxable income
❖ Answer: ₱3,700,000 computed as:
Gross business income ₱ 6,200,000
OPEX (2,500,000)
Net income before contributions ₱3,700,000
Contributions – Deductible in full:
Contributions to Gov’t for priority projects (100,000)
Contributions – Deductible with limit:
***Actual = 100,000
Limit = ₱3,700,000 x 5% = 185,000
Allowed (Lower Amount) (100,000)
Taxable income ₱3,500,000
*** Composed of:
➢ Contributions to the government for public purpose
➢ Contributions to domestic charitable institutions.
❖ The contributions to a Foreign Private Foundation is non-deductible expenses.
EXPLANATION:
So here, I’m going to use the solution or a formula for corporate taxpayers. To determine the
taxable income is we need to compute first the Net Income before contributions based on the
given provided. The gross income is a total of 6,200,000 pesos. Then we’re going to minus the
operating expense, which is the total of 2,500,000 pesos, and the result is 3,700,000 pesos, and
this is the net income before contribution.
Now, we determine the net income before contribution. We're going to move to step 2, which is
we’re going to determine the deductible contribution based on the given. The fully deductible
amount on the given is the contribution to the government for the priority project in education
because it meets the criteria set by the Philippine Tax Code under section 34 (H) with an amount
of 100,000 pesos, and it will serve as an actual amount. Next, the deductible with a limit is the
contribution to a domestic charitable organization, then we’re going to multiply the net income
before the contribution by 5%, and it equals 185,000 pesos. Now, we’re going to compare the total
actual amount versus the limit, and we will choose whichever is lower. Since the actual amount is
lower than the limit, we will deduct the lower amount.
Lastly, we’re going to step 3, which is to determine the taxable income. The first thing we need to
do is minus the contribution to the government for priority projects and the limit amount from the
net income before contribution. So, 3,700,000 pesos minus 100,000 pesos and minus another
100,000 pesos, then the amount will be 3,500,000 pesos, and that’s the taxable income for the
corporate taxpayer.
Moreover, as you can see, the foreign private foundation is non-deductible because it does not
meet the criteria for deductible donations under Section 34(H) of the Philippine Tax Code. And
only donations to the Philippine Government or its agencies for public purposes are fully
deductible. That’s all, thank you.