BIR Ruling No. 507-2019

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

BIR Ruling No. 444-2014 Section 30 of the National Internal Revenue Code of 1997, as amended BIR Ruling No. 001-2017; 0507-2019

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Novaliches, Caloocan City MARIA MEDIATRICE, INC. 68 JP Ramoy St., Talipapa

Attention: REY JOY B.BAJO CEO/President

Gentlemen:

MEDIATRICE, INC. for the issuance of a certificate of tax exemption enioyed by non-stock non-profit corporation or association pursuant to Section 30 of the National Internal Revenue Code (NIRC) of 1997, as amended. This refers to your letter dated May 5, 2018, requesting on behalf of MARIA

Identification No.(TIN) existing under the laws of the Republic of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Company Registration No. It is represented that MARIA MEDIATRICE, INC. with BIR Taxpayer's dated July 4, 2017, is a non-stock, non-profit association duly organized and and Certificate of Registration No. and with

corporation/association was incorporated are: SEC Certificate of Incorporation dated July 4, 2017; and that the purposes for which the

1. To make the Immaculate Virgin Mary known and loved by promoting & popularizing devotion to Her by any licit means.

2. To link local & foreign financial donors in order to support, maintain, and to aid in any manner, directly or indirectly any charitable activities, shrines. publications of devotional articles, books, liturgical messages and services. all for the increase devotion and veneration to Mary Immaculate.

3 To accept donations of personal or real property from persons or entities

desiring to donate to the association.

No. 001-2017 dated January 05, 2017) operation for at least three (3) years that it is really an association exempt from income tax under Section 30 of the National Internal Revenue Code of 1997, as amended. (BIR Ruling Certificate of Tax Exemption because MARIA MEDIATRICE, INC. has to prove by actual In reply, please be informed that this Office cannot as yet issue the requested

profit regardless of the disposition thereof, which income should be returned for taxation. internal revenue taxes imposed under the National Internal Revenue Code of 1997, as amended, on its income derived from any.of its properties, real or personal, or any activity conducted for In the meantime, MARIA MEDIATRICE, INC. is subject to the corresponding

royalties derived from sources within the Philippines are subject to the twenty percent (20%) benefits from deposit substitute instruments and from trust funds and similar arrangements, and Likewise, interest income from currency bank deposits and yield or any other monetary

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National Internal Revenue Code of 1997, as amended. (BIR Ruling No. 444-2014 dated final withholding tax: provided, however, that interest income derived by it from a depository bank under the expanded foreign currency deposit system shall be subject to 15%i final withholding tax pursuant to Section 27 (D) (1), in relation to Section 57 (A), both of the October 30, 2014)

as withholding agent of the government if it acts as an employer and its employee receives National Internai Revenue Code of 1997, as amended, also as implemented by Revenue Regulations No. 2-98, as amended. compensation income subject to the withholding tax under Section 79 (A), Chapter XIII, Title II of the National Internai Revenue Code of 1997, as amended, -as implemented by Revenue Regulations No. 2-98, as amended, or if it makes income payments to individuals or corporations subject to the expanded withholding tax provided for in Section 57 (B) of the AIso, it should be understood that MARIA MEDIATRICE, INC. shall be constituted]

amended, any provision of existing general and special law to the contrary notwithstanding, incentives shall be subject to examination by the Bureau of Internal Revenue 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. the books of accounts and other pertinent records of tax-exempt organization or grantees of tax Moreover, under Section 235 of the National Internal Revenue Code of 1997, as

related to the activities for which the Association is registered under Section 6 (C) in relation to Section 237 of the same Code [Revenue Memorandum Circular (RMC) No. 76-2003]. Pesos (PhP500.00) as prescribed in Section 236 (B) of the National Internal Revenue Code of invoices for each sale or transfer of merchandise or for services rendered which are not directly 1997, as amended. It is also required to issue duly registered receipts or sales or commercial Furthermore, it is subject to the payment of the annual registration fee of Five Hundred

Value-Added Tax/Percentage Tax

Section 105 of the'National Internal Revenue Code of 1997, as amended, provides that:

tax (VAT) imposed in Sections 106 to 108 of the same Code. business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added "SEC. 105. Persons Liable. - Any person who, in the course of trade or

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person engaged therein is a non-stock," non-profit private organization conduct or"pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the (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

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it shall be liable for 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos (P3,000,000.00)2, or to the 3% percentage tax, if gross receipts do not exceed services in the course of a business pursuit, including transactions incidental thereto, in general. P3,000,000.00. Accordingly, if MARIA MEDIATRICE, INC. is engaged in the sale of goods or

1 Republic Act No. 10963 increased the tax rate from 7.5% to 15% effective January 1, 2018. 2 Republic Act No. 10963 increased the VAT threshold from P1,919,500.00 to P3,000,000.00 effective January 1, 2018.

MARIA MEDLATRICE, INC. PAGE 3 0F 4 SEP 1 0 2019 0 5 0 7 - 2019

properties or services and importation of goods shall nevertheless be subject to the 12% value- added tax (VAT) pursuant to'Sections 106 to 108 of the said Code. Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or

additional cost which the buyer/customer has to pay in order to obtain the goods or services. buyer/customer as an addition to the cost of goods or services sold, it is. no longer a tax but an buyer/purchaser, transferee or lessee of the goods, properties or services. Once shifted to the purchaser of goods. Being an indirect tax, the amount of tax may be shifted or passed on to the It must be noted that VAT is an indirect tax payable by the seller and not by the

educational activities, is exempt from the 12% VAT. services or sale of goods made in the course of business but rather in connection with its However, revenue from contributions and donations, not being derived from sale of

July 22, 2013: after the three (3)-year period, MARIA MEDiATRICE, INC. is required to submit the following documents pursuant to Revenue Memorandum Order (RMO) No. 20-2013 dated Finally, for. purposes securing 2 CertificateofTaxExemption

A. Original copy of application letter for issuance of Tax Exemption Ruling. Internal Revenue Code of 1997, as amended, under which the application for exemption / revalidation is being based; The letter shall cite the particular paragraph of Section 30 of the National

B. SEC Certified true copy of its Certificate of Incorporation; C. SEC Certified true copy of its Articles of Incorporation or latest Amended the following provisions: Articles of Incorporation which must specifically include and clearly state

1. That the association is non-stock, non-profit; 2. That the primary purpose for which the association was created is one of those enumerated under Sec. 30 of the National Internal Revenue Code of 1997, as amended:

3 That no part of the net income of the association shall inure to the benefit of any its members or private individual; 4. That the trustees of the non-profit association do not receive any compensation; and

5. In case of dissolution, its assets shall be distributed to one or more Memorandum Circular No. 51-2014); entities formed for the purpose I purposes similar to its own, or to thePhilippinegovernment - for " publicpurpose(Revenue

D. SEC Certified true copy of its By-Laws or latest Amended By-Laws; E. Original copy of a Certification under Oath by an executive officer of the association as to:

1. all previous amendments I/ changes in the Articles of Incorporation and By-laws (If there are no amendments / changes, the Certification shall state this fact); 2. manner of activities; and 3. the sources and disposition of income, if any, of the subject association:

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F. Certified true copy of its BIR Certificate of Registration;

G. Original copy of a Certification under Oath by the treasurer of the association as to the amount of income, compensation, salaries or any emoluments paid by the association to its trustees, officers and other

executive officers;

H. Original copy of a Certification issued by the Revenue District Office

(RDO) where the association is registered that the association is not the subject of any pending investigation, on-going audit, pending tax assessment, administrative protest, claim for refund or issuance of tax credit certificate, collection proceedings, or a judicial appeal; or if there be any the original copy of a Certification issued by the RDO on the status thereof:

Certified true copies of its Income Tax Returns or Annual Information Returns and Financial Statements for the last three (3) years of operation; and

J. Original copy of a Statement under Oath by an executive officer of the association as to its modus operandi which shall include:

1. A full description of the past, present, and proposed activities of the association:

2. A narrative description of anticipated receipts and contemplated expenditures; and

3. A detailed description of all revenues which it seeks to be exempted statement or application shall be subject to income tax. from income tax. All other revenues which are not included in the

if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented. However.

K-1-JAC Commissioner of Internal Revenue Mawarey CAESAR R. DULAY Very truly yours, 028956

COPY FURNISHED:

Revenue Region No. 5 -- Caloocan City Attention: Revenue District Office No. 27 -- Caloocan City