Adopt-A-School Program

ORIENTATION
 LEGAL BASIS

REPUBLIC ACT 8525 (Adopt-a-School Law of 1998)

– An Act establishing the “Adopt-a-School Program”
providing incentives therefore, and for other
purposes.

PURPOSE OF RA 8525

The Program was established to allow private entities

to assist public schools, whether elementary,
secondary or tertiary.

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 BIR Promulgated
REV. REGULATIONS 10 - 2003
To Implement the Tax
Provisions of the

Adopt-a-School Law (RA 8525) and

Implementing Rules and Regulations (IRR)
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 WORK FLOW
Meetings, review
Tax Incentives Claim Process
project proposals,
project Development Private entity submits supporting documents to
ASP Secretariat

Drafting of MOA and

reviewed by both
parties The ASP Secretariat reviews the documents
and forwards to the Coordinating Council for
approval
Finalized MOA to be
signed by the private
entity & DepED official
Chairman of Coordinating Council signs the
Signatories and notarized
endorsement for the tax incentive claim

Donor/DepED project
implementation The private entity files their quarterly/annual
income tax returns with their BIR-RDO
attaching a photocopy of the Endorsement to
support the additional 50% allowable incentive
Private Entity donates to granted under the “ASP Law.”
DepEd (DOD) and DepEd
accepts (COA)
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Standard Docs to Support Claim for
Tax Incentives under ASP
 Copy of notarized Memorandum of
Agreement
 Copy of notarized Deed of
Donation and Acceptance
 Summary of expenses and its
substantial official receipts

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 INCENTIVES GRANTED
 Additional 50% deduction from gross income of the
amount of donation/contribution (Sec 5)

 Entitlement to have the donor’s name emblazoned

in their intervention beneath the words “Adopt-a-
School” (Sec 6)

 Representation in the local school board (Sec 6)

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See the Difference
Sample Income Statement (in P Mil)
Donation
No Donation Under ASP
Sales 175.0 175.0
Less: Cost of Sales 85.0 85.0
Gross Income 90.0 90.0
Less: Operating Expenses
Salaries, utilities, etc. 15.0 15.0
Donation to a public sch. - 15.0 2.0* 17.0
Inc. Before Inc. Tax 75.0 73.0
Income Tax 26.3 25.6
Net Income 48.7 47.4
* 100% deduction as business exp. allowed under Section 34 (H) of the Tax Code
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See the Difference
Computation of Income Tax ( in P Mil)
Donation Under
No Donation ASP
Income Before Income Tax 75.0 73.0
Additional 50% deduction for 0.0 1.0
donations under RA 8525
Taxable Income 75.0 72.0
Income Tax (35% of taxable income) 26.3 25.2
Tax Savings for the donation 1.1
Allowable tax deductions the ADOPT-A-SCHOOL PROGRAM (150%)
100% allowable deduction under Section 34 (H)(a)(2) 100% P 2 Mil
Additional 50% deduction under RA 8525 (as promulgated by RR 10-2003) 50% 1 Mil
Total 150% P 3 Mil

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OTHER TAX CONSEQUENCES OF THE
ASSISTANCE TO THE PUBLIC SCHOOL

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 TESDA deemed automatically
appropriated and shall be considered
expenditure of the government under
Section 13 of Government Appropriation
Act (GAA).

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INTERVENTIONS
 Infrastructure, Physical Facilities, Furniture
and Real State
 Learning Support
 Health and Nutrition
 Reading Program
 Technology Support
 Direct Assistance
 Training and Development
 Assistive Learning Devices for Students with
Special Needs
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THANK YOU

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