BIR Ruling No. 330-2016

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNALREVENUE

Quezon City

Section 30 of the Tax Code of 1997, as

amended

BIR Ruling No. I26-14 BIR Ruling No.357-13

#330-2016 6-29-2016

U-TURN FOR CHRIST SAMAR, INC. Brgy. Lalawigan, Borongan Eastern Samar 6800

Attention : Pastor Ron Brown

President

Gentlemen:

This refers to your undated letter received by this Office on May 25, 2015

duly indorsed by Revenue Region No. 14-Palo, Leyte, requesting a certificate of tax

exemption under Section 30(E) of the Tax Code of 1997, as amended.

It is represented that U-TURN FOR CHRIST SAMAR, INC. with

profit corporation registered with the Securities and Exchange Commission (SEC) Taxpayer's Identification No. is organized as a non-stock. non-

under Registration No. dated February 28, 2014; and that the purpose

for which it was incorporated is to administer its affairs, properties and estate.

In support of your request. the following documents were submitted:

1Letter Request; 2) Certified true copy of the Certificate of Incorporation with the Securities

and Exchange Commission; 3) Certified true copy of the Corporation's Amended Articles of

Incorporation: 4)Certified true copy of the By-Laws: 5) Certified true copy of the BIR Certificate of Rcgistration 6 Executive Officer's Affidavit dated November 25, 2014 as to

amendments/changes in its Articles of Incorporation. manner of activities.

and sources and disposition of income: 7) Treasurer's Affidavit dated November 25,2014 affirming that U-Turn for

Christ Samar, Inc does not have income as per commonly defined since

thc same has no business activities. but is purcly a religious mission whose

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board of directors and officers do not receive any salary or allowances from the corporation: and 8 Certification from the OIC-Revenue District Officer, RDO No.86. Borongan, Eastern Samar certifying that U-Turn for Christ Samar, Inc. has

no outstanding internal revenue tax liabilities.

non-profit corporation under Section of the Tax Code of 1997, as amended, is hereby denied for lack of factual basis. In reply, please be informed that your request for tax exemption as a non-stock

FOR CHRIST SAMAR, INC. is a non-stock, non-profit corporation, it has to prove that it is really a corporation organized and operated as contemplated under Section 30 of the Tax Code of 1997. as amended. Notwithstanding that the Articles of Incorporation states that the U-TURN

reason alone, completcly exempt an institution from tax. (Conimissioner of Internal Revenue vs. St. Luke's Medical Center,Inc., G.R. No. 195909 & G.R. No. 195960, 26 Being registered as a non-stock and non-profit corporation does not, by this

September 2012

Note that tax exemptions are never presumed and thus, as ruled by the Supreme Court in the case of Quezon City and The City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation (G.R. No.166408 dated October 6, 2008):

"He who claims an exemption from his share of common burden must justify his claim that the legislature intended to exempi him by unmistakable terms. For exemptions from taxation are not

clearest and most unambiguous language and not left to mere favored in law, nor are they presumed. They nust be expressed in the

the burden is on the claimant to establish clearly his right to implications. It has been held that "exemptions are never presumed,

exemption and cannot be made out of inference or implications but must be laid beyond reasonable doubt". In other words, since taxation is the rule and exemption the exception, the intention to make an exemption ought to be expressed in clear and unambiguous terms.

Hence, U-TURN FOR CHRIST SAMAR,INC. shall be treated as an ordinary corporation subject to regular corporate income tax and the applicable internal revenue taxes imposed by the Tax Code of 1997, as amended.

Moreover, Section 105 of the Tax Code of 1997 provides that any person who. in the course of trade or business, sells, barters, exchanges, leases goods or propertics. renders services, and any person who imports goods shall be subject to the value- added tax (VAT imposed in Sections 106 to 108 of the same Code.

The phrase "in the course of trade or business" means the regular conduct or pursuit of a commercial or an economic activity. including transactions incidental

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U-TURN FOR CHRIST SAMAR, INC 6-29-2016

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thereto, by any person regardless of whether or not the person engaged therein is a

non-stock. non-profit private organization (irrespective of the disposition of its net

income and whether or not it sells exclusively to members or their guests). or

government entity.

Accordingly, if U-TURN FOR CHRIST SAMAR, INC. is engaged in the

sale of goods or services in the course of a business pursuit, including transactions

incidental thereto, in general, it shall be liable for VAT.

Please be guided accordingly

Very truly yours.

KIM S. JACINTO-HENARES Commissioner of Internal Revenue

K-1-JAC 042358 JUN 2 4 2016

cc:Regional Director Revenue Region 14-Palo, Leyte