BIR Ruling No. 295-2016

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OFINTERNALREVENUE

B

Certificate of Tax Exemption No.

295~2016

CERTIFICATE OF TAXEXEMPTION

issued to

91 4th St., Paradise Village, Banilad, Cebu City QUEST FELLOWSHIP,INC. TIN

SEC Reg.No.

This certifies that the above-named corporation has proven by actual operation that its primary purpose is one of those enumerated under Section 30(E) of the National Internal Revenue Code of 1997,as amended.It is exempt from INCOME TAX only on the following revenues or receipts from:

1.Tithes, love offerings, contributions, donations and aids from members

Earnings from sale of bibles which shall be used in furtherance of its and benefactors/supporters/ministry partners

purposes

nothing follows

subject to the provisions of applicable BIR rules and regulations and the tax exemptions, liabilities and responsibilities stated in the Terms and Conditions hereto attached and made an integral part hereof. It is liable, however, to all other taxes not enumerated above.

earlier revoked by this Office for violation of any provisions of applicable rules and regulations This certification shall be valid for three (3) years from the date of issuance unless

of BIR, or the terms and conditions herein set forth.

This Certificate may be renewed upon filing of a subsequent application for revalidation provided under Revenue Memorandum Order (RMO) No. 20-2013. Failure to renew this Certificate shall be deemed a revocation thereof upon the expiration of the three (3)-year

period.

This Certificate of Tax Exemption is being issued on the basis of the facts and documents as represented and submitted. However, if upon investigation, the BIR ascertains

that the facts are different, then this Certificate shall be considered null and void.

Issued this day of

KIM S.JACINTO-HENARES

K-1-RFR Commissioner of Internal Revenue 042344

QUEST FELLOWSHIP,INC. CTE No. 295-2016

Page 2 of 4 Date issued 6-27-2016

TERMS AND CONDITIONS

OF THE CERTIFICATE OF TAX EXEMPTION

FOR NONSTOCK CORPORATION OR ASSOCIATION

ORGANIZED AND OPERATED EXCLUSIVELY FOR RELIGIOUS PURPOSES

UNDER SECTIONS 30(E)

To be cntitled to the tax exemptions enumerated herein. the association/corporation

organization must continue to meet the following requirements in accordance with Revenue

Memorandum Order No.20-2013.to wit:

b It must be a non-stock corporation or association organized and operated exclusively for religious purposes. It should meet the following tests:

Organizational Test- requires that the corporation or association's constitutive documents exclusively limit its purposes to one or more of those described in paragraph (E) of Section 30 of the NIRC, as amended.

Operational Test- mandates that the regular activities of the corporation or association be exclusively devoted to the accomplishment of the purposes specified in paragraph (E) of Section 30 of the NIRC,as

amended. A corporation or association fails to meet this test if a substantial part of its operations may be considered "activities conducted for profit" All the net income or assets of the corporation or association must be

devoted to its purpose/s and no part of its net income or asset accrues to or benefits any member or specific person. Any profit must be plowed back and must be devoted or used altogether for the furtherance of the purpose for which the corporation or association was organized. It must not be a branch of a foreign non-stock, non-profit corporation.

TAX EXEMPTIONS

QUEST FELLOWSHIP, INC. is exempt from the payment of income tax only on revenues and

receipts enumerated on the Certificate of Tax Exemption provided, that no part of its net income or

asset shall belong to, or inure to the benefit of any member, organizer, officer or any specific person.

2) Donations to it are exempt from the payment of donor's tax pursuant to Section 101(A)(3) of the

National Internal Revenue Code of 1997, as amended, subject to the condition that not more than

thirty percent (30%) of said gift shall be used for administration purposes. (BIR Ruling No. 153-11

dated May 17,2011)

3)Deductibility of Donations to Accredited Non-stock, Non-profit Corporations/NGOs.

Section 34 (H)(1) of the National Internal Revenue Code of 1997, as amended, provides that for

contributions or gifts actually paid or made within the taxable year to, or for the use of corporations

or associations organized and operated exclusively, among others, for religious purposes, their

donors shall be entitled to the limited deductions in an amount not in excess of 10% in the case of

an individual and 5% in the case of a corporation, of the donor's taxable income derived from trade.

business or profession as computed without the benefit of this deduction and the subparagraphs of

Section 34 (H) (1) of the National Internal Revenue Code of 1997, as amended.

QUEST FELLOWSHIP, INC. Page 3 of 4 Date issued _Om72016 CTE No.2952016

LIABILITY FOR INTERNAL REVENUE TAXES

D INCOME TAX

QUEST FELLOWSHIP,INC. is subject to income tax on all its income/receipts/revenues not expressly exempted and stated in the Certificate of Tax Exemption.

Moreover, it is subject to the corresponding internal revenue taxes imposed under National Internal Revenue Code of 1997, as amended, on its income derived from any of its properties, real or should be returned for taxation. (BIR Ruling No. 153-11 dated May 17, 2011) personal, or any activity conducted for profit regardless of the disposition thereof, which income

the National Internal Revenue Code of 1997, as amended. (BIR Ruling No. 153-11 dated May 17, derived from sources within the Philippines are subject to the twenty percent (20%) final the expanded foreign currency deposit system shall be subject to seven and one-half percent (7- Likewise, interest income from currency bank deposits and yield or any other monetary benefits from deposit substitute instruments and from trust funds and similar arrangements, and royalties withholding tax: Provided, however, that interest income derived by it from a depository bank under 1/2%) final withholding income tax pursuant to Section 27(D)(1) in relation to Sec. 57(A) both of 20

2) VALUE-ADDED TAX

Section 105 of the National Internal Revenue Code of 1997, as amended, provides that any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, 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.

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

for VAT. (BIR Ruling No.153-11 dated May 17,2011) Accordingly, if QUEST FELLOWSHIP, 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

goods or services in the course of a business pursuit, including transactions incidental thereto, in general, it shall also be liable for VAT. (BIR Ruling No. 138-2011 dated April 29, 2011) or services and importation of goods shall nevertheless be subject to the 12% VAT pursuant to dated May 17, 2011) Accordingly, if the non-stock non-profit corporation is engaged in the sale of Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or properties Section 107 of the National Internal Revenue Code of 1997, as amended. (BIR Ruling No. 153-11

Revenue from contributions and donations, not being derived from sale of services or sale of goods made in the course of business but rather in connection with its non-stock, non-profit activities, is exempt from the 12% VAT.

QUEST FELLOWSHIP. INC. CTE No. 2952016

Page 4 of 4 Date issued E2706

3) WITHHOLDING TAX

QUEST FELLOWSHIP, INC. shall be constituted as withholding agent for the government if it acts as an employer and its employees receive compensation income subject to the withholding tax under Section 79A.Chapter XIII,Title II of the NIRC,as implemented by Revenue Regulations No. 2-98, as amended, or if it makes income payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the National Internal Revenue Code of 1997, as amended. and as implemented by Revenue Regulations No. 2-98, as amended. (BIR Ruling No. 153-11 dated)

May 17.201D

TAXPAYER DUTIES&RESPONSIBILITIES

l) The Articles of Incorporation of QUEST FELLOWSHIP, INC. must include the following provisions pursuant to RMO 20-2013 and RMC14-01: a that the corporation is non-stock, non-profit;

b.that the primary purpose for which it was created is one of those enumerated under Sec. 30 of

the Tax Code of 1997:

2 that no part of the net income shall inure to the benefit of any its members; d.the trustees do not receive compensation or remuneration'; and e. in case of dissolution, assets of the corporation shall be transferred to similar institution or to

District Officer where it is registered. Any change or amendment in the charter, By-Laws, Articles of Incorporation, manner of activities as well as sources and disposition of income should be communicated immediately to the Revenue the government

2) QUEST FELLOWSHIP, INC. is likewise required to file on or before the 15th day of the fourth laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition during the preceding period and a certificate showing that there has not been any change in its By month following the end of the accounting period a Profit and Loss Statement and Balance Sheet with the Annual Information Return under oath, stating its gross income and expenses incurred of income.

3) Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual Information Return.

4)Under Section 235 of the National Internal Revenue Code of 1997, as amended, any provision of it has been granted tax exemptions or tax incentives, and its tax liabilities, if any. existing general and special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organization or grantees of tax incentives shall be subject to examination by the BIR for purposes of ascertaining compliance with the conditions under which

5)Further, it is also required under Section 6(C) in relation to Section 237 of the National Internal related to the activities for which the Association is registered. (Revenue Memorandum Circular No. [RMC] No.76-2003). invoices for each sale or transfer of merchandise or for services rendered which are not directly Revenue Code of 1997, as amended, to issue duly registered receipts or sales or commercial

6)Finally, it is subject to the payment of registration fee of PhP500.00 as prescribed in Section 236(B) of the National Internal Revenue Code of 1997, as amended.

Not applicable for Religious corporations organized as corporation sole