BIR Ruling No. 297-2016

REPUBLICOETUEPHLIPPINES

DEPARTMENTOFFINANCE

BIREAUOFINTERNALREVENUE

Certificate of Tax Exemption No.

297-2016

CERTIFICATE OF TAX EXEMPTION

issued to

THE ROMAN CATHOLIC BISHOP OF MAASIN,INC.

Bishop's Residence Compound, Asuncion. Maasin City,Southern Leyte 6600

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:

1. Remittances from the different Parishes within the Diocese of Maasin; 2. Voluntary contributions among its members; 3. Grants, gifts and/or donations by kind hearted individuals.

---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.

This certification shall be valid for three (3) years from the date of issuance unless

earlier revoked by this Office for violation of any provisions of applicable rules and regulations

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 Commissioner of Internal Revenue 042366

K-Y-JAC

The Romun Catholic Bishop of Maasin,Inc. Page2of 4 Date issued 6--27-2016 CTE No.297-2016

TERMS AND CONDITIONS

OF THE CERTIFICATE OF TAX EXEMPTION

For Religious Organizations

Under Section 30 (E) of the National Internal Revenue Code of 1997, as Amended

To be entitled 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:

a It must be a non-stock corporation or association organized and operated

exclusively for religious purposes.

C 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.

I 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.

d It must not be a branch of a foreign non-stock, non-profit corporation.

TAX EXEMPTIONS

1)INCOME TAX. THE ROMANCATHOLIC BISHOP OF MAASIN, 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) DONOR'S TAX. Donations to THE ROMAN CATHOLIC BISHOP OF MAASIN, INC. are

exempt from the payment of donors 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.

a. Deductibility of Donations. 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.

The Roman Catholic Bishop of Maasin, Inc. CTE No.297016

Page 3 of 4 Date issued 627-2016

LIABILITY FOR INTERNALREVENUE TAXES

1)INCOME TAX

income/receipts/revenues not expressly exempted and stated in the Certificate of Tax THE ROMAN CATHOLIC BISHOP OF MAASIN,INC.is subject to income tax on all its

Exemption.

Moreover, it is subject to the corresponding internal revenue taxes imposed under National Internal

personal, or any activity conducted for profit regardless of the disposition thereof, which income Revenue Code of 1997, as amended, on its income derived from any of its properties, real or

should be returned for taxation.

derived from sources within the Philippines are subject to the twenty percent (20%) final 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

the National Internal Revenue Code of 1997, as amended. the expanded foreign currency deposit system shall be subject to seven and one-half percent (7- 1/2%) final withholding income tax pursuant to Section 27(D)(1) in relation to Sec. 57(A) both of

2) VALUE ADDED TAX

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

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 thereto, by any person regardless of

(irrespective of the disposition of its net income and whether or not it sells exclusively to members whether or not the person engaged therein is a non-stock, non-profit private organization

or their guests), or government entity.

Accordingly,if THE ROMAN CATHOLIC BISHOP OF MAASIN,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.

Section 107 of the National Internal Revenue Code of 1997, as amended. Accordingly, if the non- stock non-profit corporation is engaged in the sale of goods or services in the course of a business Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or properties or services and importation of goods shall nevertheless be subject to the 12% VAT pursuant to

pursuit, including transactions incidental thereto, in general, it shall also be liable for VAT.

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.

3) WITHHOLDING TAX

THE ROMAN CATHOLIC BISHOP OF MAASIN, 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 79 (A), Chapter XIII, Title II of the NIRC. as implemented by Revenue Regulations No. 2-98, as amended, or if it makes income payments to

The Roman Catholic Bishop of Maasin, Inc. Page 4 of 4 Date issued72016 CTE No.297-2016

individuals or corporations subject to the withholding tax pursuant to Section 57 of the National 98, as amended. Internal Revenue Code of 1997.as amended,and as implemented by Revenue Regulations No.2-

TAXPAYER DUTIES&RESPONSIBILITIES

1) The Articles of Incorporation of THE ROMAN CATHOLIC BISHOP OF MAASIN,INC.must include the following provisions pursuant to RMO 20-2013, RMC 51-2014 and RMC 14-01: b.that the primary purpose for which it was created is one of those enumerated under Sec. 30 of a.that the corporation is non-stock, non-profit; C. that no part of the net income shall inure to the benefit of any its members; the Tax Code of 1997;

C. the trustees do not receive compensation or remuneration'; and in case of dissolution, assets of the corporation shall be transferred to similar institution or to

the government

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

2) THE ROMAN CATHOLIC BISHOP OF MAASIN,INC.is likewise required to file on or before the 15th day of the fourth 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 during the preceding period and a certificate showing that there has not been any change in its By-laws, Articies of Incorporation, manner of operation and activities as well as sources and disposition 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 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 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

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

6)Finally, it is subject to the payment of registration fee of PhP 500.00 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