Authorizing The Exemption From Payment Of Donor's Tax And Recognizing As Deductible Business Expense Irrevocable Donations Of American-Owned Private Lands Acquired Under The Laurel-Langley

Case Overview and Summary

Summary of Presidential Decree No. 697

Exemption from Donor's Tax for Irrevocable Donations of American-Owned Private Lands
- Irrevocable donations of American-owned private lands acquired under the Laurel-Langley Agreement are exempt from donor's tax, subject to the following requirements: (Section 1)
• Donations must be at the fair market value established in 1974 as a basis for real estate tax payment. (Section 1a)
• Donations must be made to qualified donees, which include: (Section 1b)
    1. The National Government or any of its non-profit entities or political subdivisions. (Section 1b1)
    2. Organizations exempted by other laws from donor's tax. (Section 1b2)
    3. Charitable or scientific organizations with a nationwide scope, such as Philippine Red Cross, Community Chests, Boy Scouts of the Philippines, and Philippine Heart Foundations. (Section 1b3)

Exclusions from Exemption
- The exemption does not apply to donations made to family-owned or controlled foundations, foundations created specifically to receive land donations, or foundations with a limited scope or purpose. (Section 2)

Deductible Business Expense for Income Tax Purposes
- Qualified donations are recognized as deductible business expenses for income tax purposes. (Section 3)
- The donor must indicate the period, not exceeding four years including the year of donation, over which the expense deductions will be taken in equal increments. (Section 3)

Deadline for Submission of Donation Proposals
- The incentives are available only to American private landowners who submit formal donation proposals to qualified donees before May 27, 1975. (Section 3)

Effective Date
- The Decree took effect immediately upon issuance on May 9, 1975. (Section 4)