DOST Science Foundation Unit is mandated by Republic Act No. 2067, “An Act to Integrate,Coordinate, and Intensify Scientific and Technological Research and Development and to Foster Invention; to Provide Funds Therefor; and for Other Purposes”.
Science and technology oriented foundations are certified for tax exemption purposes pursuant to Section 24 of R.A. No. 2067 (Science Act) as amended by R.A. No. 3589.
The Science Foundation Unit (SFU) is one of the offices of the Department of Science and Technology (DOST) the provides frontline services, and is under the direct supervision of the Undersecretary for Scientific and Technological Services.
The operations of SFU had been mandated by Republic Act No. 2067, “An Act to Integrate,Coordinate, and Intensify Scientific and Technological Research and Development and to Foster Invention; to Provide Funds Therefor; and for Other Purposes”. This was later amended in the Republic Act No. 3589, “An Act Amending Republic Act No. 2067 Modifying the National Science Development Board, National Institute of Science and Technology, and the Philippine Atomic Energy Commission, Extending Tax Exemption, Privileges on Grants, Requests and Donations for Scientific Purposes to Private Educational Institutions, and for Other Purposes”. The Science Foundation Unit performs the following:
SFU ensures the integrity of the DOST certification and bridge collaborative tie-ups between the Department of Science and Technology and the certified science foundations, as it looks forward to the materialization and advancement of S&T projects and programs for the common good of the science community and the nation as a whole.
|Step||Activity of the Office-in-Charge||Duration of Activity||Office-in-charge|
|1||Receives letter of request and required documents; reviews completeness of the submitted documents; verifies documents relative to the application; and prepares acknowledgement letter of the submitted documents for OUSECSTS’ approval||1 working day||STFU|
|2||Approves and returns communication to STFU||1 working day||Undersecretary for S&T Services|
|3||Transmits documents to concerned DOST Agency/Council||45 minutes||STFU|
|4||Evaluates Programs/Projects/Activities (PPAs) based on DOST criteria||10 working days||DOST Agency/ Council|
|5||Prepares consolidated reports e.g. evaluation/ recommendation, certificate as science foundation for approval of the OUSECSTS||1 working day||STFU|
|6||Clears/endorses documents for DOST Secretary’s action||1 working day||Undersecretary for S&T Services|
|7||Approves/Disapproves application||1 working day||Office of the Secretary|
|8||Transmits approved application and advises applicant foundation on the course of action to be undertaken, e.g. payment of registration fee||1 hour||STFU|
|9||Returns Conforme Letter to STFU and pays registration fee||1 hour||Applicant foundation|
|10||Acknowledges payment and issues official receipt||2 working days||Cashier|
|11||Mails Conforme Letter, Certificate as Science Foundation, and Official Receipt to applicant||10 minutes||Records Section|
Pursuant to the provisions of Section 9 of Republic Act No. 2067 (hereinafter referred to as the “Science Act of 1958”), as amended by Republic Act No. 3589, Section 27 of Executive Order No. 784 dated March 17, 1982, the following rules and regulations are hereby promulgated to implement Section 24 of the “ Science Act of 1958”.
SEC. 1. DEFINITIONS – for the purposes of these rules and unless otherwise indicated, the terms herein enumerated shall have the following meanings:
SEC. 2. WHO MAY APPLY – In order to avail of the benefits of Section 24 of the Science Act of 1958, as amended, the following may apply for certification:
SEC. 3. APPLICATION REQUIREMENTS FOR FOUNDATIONS - The application for certification of a private foundation, which shall be under oath and filed with the DOST in two (2) copies shall be accompanied by:
SEC. 4. APPLICATION REQUIREMENTS FOR SPECIFIC PROJECTS –The application for the certification of specific research and development projects undertaken by private individuals, firms and educational institutions, or by foundations which do not qualify for certification under Sec. 6, Article III, shall be under oath and, in each case, filed with the DOST in three (3) copies. It shall be accompanied by a project study in the form prescribed by the NSTA and subsequently approved by the DOST. (Not applicable).
SEC. 5. PROCESSING OF APPLICATION – Application under these rules shall be processed by the Science Foundations Staff (Office of the Secretary), DOST. The staff may conduct an investigation of the applicant foundation. It may request the views and recommendation of any government official or private individuals and may require the applicant or its representative to appear before it to clarify or substantiate the statements in the application.
SEC. 6. CONDITIONS UNDER WHICH CERTIFICATION ISSUED
The foundation has a program of research and development approved by the DOST consistent with its purposes as stated in its articles of incorporation and that the actual operations justify its continuing existence as a viable and actual science foundation rather than as a mere conduit for receiving tax-free contribution or funds raised by occasional fund drives. Results of its researches shall be copyrighted or patented in the name of the foundation.
SEC. 7. ISSUANCE OF CERTIFICATION - if the application is in order, the DOST Secretary, after taking into consideration the findings and recommendation of the Undersecretary, shall issue a certification that the applicant is a DOST-certified Science Foundation as defined in these rules and regulations.
SEC. 8. LIFE OF CERTIFICATION – The certification referred to in Sec. 7, Article III issued under these rules shall be effective not earlier than the date of filing of the application and shall be in force for a period of not longer than five (5) years unless sooner revoked.
SEC. 9. ANNUAL REPORTS – During the period of certification, the foundation shall submit annually to the DOST within ninety (90) days after the end of its fiscal year in the forms prescribed for the purpose the following:
The above-stated financial statements shall be certified by an independent Certified Public Accountant.
SEC. 10. RENEWAL OF CERTIFICATION – The certification shall be renewed by the DOST Secretary for the same period of time upon application duly filed in three (3) copies not later than ninety (90) days after its expiration, provided that the application is submitted with the following requirements:
SEC. 11. GROUNDS FOR REVOCATION/SUSPENSION – The certification referred to in Sec. 7, Article III shall be revoked or suspended by the DOST Secretary on any of the following grounds:
SEC. 12. ISSUANCE OF CERTIFICATION – The DOST Secretary may certify specific research and development projects undertaken by private individuals, firms and educational institutions, or foundations which do not qualify for certification under the provision of Sec. 6, Article III of these rules upon submission of a project study following DOST project proposal forms and its subsequent approval by the DOST.
SEC. 13. SEPARATE ACCOUNTING OF PROJECT –Separate books of accounts shall be kept indicating the amounts contributed to the certified project and the purpose or purposes for which they were used, which shall be subject to inspection by the DOST.
SEC. 14. GROUNDS FOR REVOCATION/SUSPENSION – The certification referred to in Sec. 12 shall be revoked or suspended by the DOST Secretary on any of the following grounds:
SEC. 15. TAX- EXEMPTION OF CONTRIBUTION - all funds contributed to the support and maintenance of private foundation certified under these rules and their projects as well as specific research and development projects undertaken by private individuals, firms or institutions shall be tax- exempt and deductible in their entirety from the income tax return of the donors upon certification issued by the DOST. (*Revised. Please see attached tax incentives list and BIR Memorandum dated August 30, 1988 attached).
SEC. 16. APPLICATION REQUIREMENTS – The application for the certificate of tax-exemption of donations shall be accompanied by the Deed of Donation and Acceptance duly notarized. In addition thereto, the following shall also be submitted:
SEC. 17. VALUATION OF DONATION
SEC. 18. INCOME TAX EXEMPTION – All income of whatever kind and character which the foundation may derive from any of its properties, real or personal, or from its investments shall also be tax-exempt. (*Revised. Please see attached Sheet).
SEC. 19. INSPECTION - foundations certified under these rules shall be subject to inspection, review and audit of their books which should be duly registered with the BIR, facilities and projects at least once a year during office hours by the DOST.
SEC. 20. REGISTRATION FEE - A registration fee of 500.00php shall be collected from every foundation certified under these rules. (*Revised. Please see attached DOST Memorandum Circular No. 001)
SEC. 21. ANNUAL SERVICE FEE - The foundation shall pay an annual and/or service fee of 0.12 of 1% of its gross receipts but not less than 500.00php. (*Revised. Please see attached DOST Memorandum Circular No.001)
SEC. 22. PENALTIES – Any person who evades or defeats or attempts to evade or defeat, in any manner, any tax imposed by law by availing himself of the provisions of Section 24 of the Science Act of 1958 through fraud and misrepresentations or violations shall be punished by a fine of not more than four thousand (4,000.00php) pesos or imprisonment for not more than (1) year or both, in discretion of the court.
In case the violator is a corporation or association, the penalty shall be fine of not more than ten thousand (10,000.00php) pesos, without prejudice to the criminal responsibility of the member, officer or employee thereof committing such violation.
SEC. 23. Effectivity – These rules and regulations and amendments thereto shall take effect thirty (30) days after publication in the Official Gazette.
EXISTING TAX INCENTIVES GRANTED TO DONORS AND SCIENCE FOUNDATIONS UNDER THE TAX REFORM ACT OF 1997 (revised IRC) or the R.A No. 8424 and the TARIFF AND CUSTOMS CODE (TCC) OF THE PHILIPPINES
For purposes of these exemptions, a science foundation is a private non-stock and non-profit institution or organization duly registered with the Securities and Exchange Commission (SEC), operated in the public interest and governed by trustees who received no compensation nor any type of remuneration in cash or in kind, and devoting at least sixty (60%) percent of its gross income to undertaking, directly financing or assisting S&T activities/DOST priorities.