The Adopt-a-School Act Tax Deduction: How RR No. 13-2025 Simplifies Claiming It

Republic Act No. 8525, the Adopt-a-School Act of 1998, lets a private company that donates to a public elementary, secondary, or tertiary school deduct 150% of the donation’s value from its gross income — not just the actual amount given — and claim exemption from donor’s tax on top of that. Revenue Regulations (RR) No. 13-2025, effective April 17, 2025, consolidated and simplified how a donor proves entitlement to that deduction, and Revenue Memorandum Circular (RMC) No. 23-2026 followed in 2026 to clarify the paperwork further after companies flagged compliance gaps.

What does the Adopt-a-School Act actually give a donor? #

A private entity that signs an adopt-a-school agreement with a public school gets two separate tax benefits on the same donation: an income tax deduction worth more than the cash given, and a donor’s tax exemption. P&A Grant Thornton’s published summary of RR No. 13-2025 describes the regulation’s operative rule this way:

“A private entity that enters into an agreement with a public school to provide assistance, support, or donation may be entitled to an additional deduction of 150% from gross income of the donation amount, provided it is actually, directly and exclusively incurred in the program.”

In plain terms, every peso donated reduces taxable gross income by ₱1.50, not ₱1.00. The BIR’s own PDF of RR No. 13-2025 was not directly reachable from this research environment, so this wording is a secondary source’s characterization of the rule rather than a quote lifted from the regulation’s own text — confirm the regulation’s exact wording on the BIR’s site before relying on it for a specific filing position. The same assistance can also qualify as exempt from donor’s tax under Sections 101(A)(2) and (B)(1) of the Tax Code, since RA 8525 treats it as a donation for the use of the national government for an educational purpose, the same general basis that exempts a straight donation to a government agency or political subdivision.

This differs from the more familiar deduction most donors already know about:

See Donations to Accredited NGOs: Full vs. Limited Deductibility for that separate regime — don’t confuse the two when deciding which documentation a specific donation needs.

Why did the BIR need to streamline this in 2025 and 2026? #

RR No. 13-2025 replaced older, harder-to-follow procedures — dating back to RR No. 10-2003 — for proving an Adopt-a-School donation qualifies for the 150% deduction, and RMC No. 23-2026 followed to fix documentation gaps companies ran into after the new regulation took effect. The Department of Finance framed the 2025 overhaul as removing friction that discouraged companies from using the incentive at all: outdated paperwork requirements made it hard for private entities to actually claim benefits the law had promised since 1998. RR No. 13-2025 consolidates the rules for both RA 8525 (Adopt-a-School) and the newer RA No. 12063 (Enterprise-Based Education and Training Framework Act) into one regulation, with an effectivity date of April 17, 2025. RMC No. 23-2026 is a narrower, 2026 clarification of that regulation after stakeholders — companies and schools working through the new procedure — raised concerns about remaining compliance requirements and procedural gaps; it addresses the documentary submission side specifically. The BIR’s own 2026 issuance was not directly reachable from this research environment (bir.gov.ph and bir-cdn.bir.gov.ph did not resolve), so confirm RMC No. 23-2026’s exact documentary checklist on the BIR’s site before filing a claim based on it.

Worked example: a manufacturing company donating computer lab equipment #

Consider a mid-sized manufacturer that signs an adopt-a-school agreement with a public high school and donates ₱500,000 worth of computer lab equipment and installation costs for the 2026 school year. Here’s how the two incentives apply:

1. Actual donation value: ₱500,000, substantiated by the supplier invoice and a deed of donation or equivalent document acknowledging the school’s receipt of the equipment.
2. Income tax deduction claimed: 150% of ₱500,000 = ₱750,000 deducted from the company’s gross income for the taxable year — ₱250,000 more than the cash actually spent.
3. Donor’s tax: None due on the ₱500,000 transfer, because it qualifies as a donation for the use of a political subdivision (the public school) for an educational purpose under Sections 101(A)(2)/(B)(1) of the Tax Code.
4. Substantiation kept on file: the signed adopt-a-school agreement, a sworn declaration tying the ₱500,000 in expenses to the program, and the official receipts and supplier invoices — the documents the BIR will look for on post-audit to confirm the amount was actually, directly, and exclusively incurred in the program.

At a 25% corporate income tax rate, that ₱250,000 excess deduction is worth roughly ₱62,500 in tax saved on top of whatever the company already saves from deducting the ₱500,000 itself — a meaningful incentive for a donation many companies would consider making anyway as part of a corporate social responsibility program.

What should a donor not assume? #

The 150% deduction is not automatic just because a company gave something to a public school — it depends on a signed adopt-a-school agreement and documentation that ties the expense specifically to that program. A cash or in-kind gift made informally, without the RA 8525 agreement structure, does not automatically qualify for the enhanced deduction; it may still be deductible under ordinary rules, but not at the 150% rate. Likewise, don’t substitute the NGO donation paperwork (such as a BIR Form 2322 Certificate of Donation, used for Section 34(H) donations to accredited NGOs) for what an Adopt-a-School claim needs — the two regimes have separate documentary requirements, and mixing them up is a common way a deduction gets disallowed on audit.

Frequently Asked Questions #

What tax deduction does the Adopt-a-School Act give a donor? #

Under Revenue Regulations No. 13-2025, a private entity that enters into an agreement with a public school to provide assistance, support, or donation under Republic Act No. 8525 (the Adopt-a-School Act of 1998) may claim an additional deduction of 150% of the donation’s value from its gross income, provided the amount is actually, directly, and exclusively incurred in the adopt-a-school program.

Does the donor also get a donor’s tax exemption? #

Yes. In addition to the 150% income tax deduction, assistance given under the Adopt-a-School Act may be exempted from donor’s tax under Sections 101(A)(2) and (B)(1) of the Tax Code, since it is treated as a donation made to or for the use of the national government or a political subdivision for an educational purpose.

What is RR No. 13-2025 and what did it change? #

Revenue Regulations No. 13-2025, issued by the BIR with an effectivity date of April 17, 2025, consolidates and simplifies the procedures and documentary requirements for claiming tax exemptions and incentives under RA No. 8525 (Adopt-a-School Act) and RA No. 12063 (the Enterprise-Based Education and Training Framework Act), replacing older, harder-to-follow procedures under regulations such as RR No. 10-2003.

What is RMC No. 23-2026 and how does it relate to RR No. 13-2025? #

Revenue Memorandum Circular No. 23-2026 is a 2026 BIR clarification of RR No. 13-2025, issued after stakeholders raised concerns about compliance requirements and procedural gaps; it addresses documentary submission requirements to make the incentive easier to access in practice.

What documents does a donor need to keep to support the deduction? #

A donor should keep the adopt-a-school agreement with the public school, a sworn declaration connecting the claimed expenses to the program, and the official receipts and other supporting documents for the donation — these are what the BIR will examine on post-audit to confirm the amount was actually, directly, and exclusively incurred in the program.

Summary #

RA 8525’s Adopt-a-School Act gives a private donor a 150% income tax deduction and a donor’s tax exemption on assistance given to a public school — a materially better deal than an ordinary donation, but one that depends on a proper adopt-a-school agreement and documentation, not just a receipt. RR No. 13-2025 and RMC No. 23-2026 streamlined the procedure for claiming it; a donor should still keep the agreement, sworn declaration, and official receipts on file in case of a BIR post-audit. For the separate, more familiar deduction most donors default to, see Donations to Accredited NGOs: Full vs. Limited Deductibility Under NIRC Section 34(H).