BIR Ruling No. 561-2017

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Section 30 (E) of the Code of 1997, as amended National Internal Revenue BIR Ruling No. 444-2014 BIR Ruling No. 001-2017: : 551-2017

12-0-2017

3/F Don Bosco Provincial House, A. Arnaiz Cor. YOUR KIDS MY KIDS FOUNDATION, INC. Chino Roces Ave.. Brgy. Pio del Pilar, Makati City

Attention:FR.ARMANDO D.ROBLEZA,SDB

President

Gentlemen:

pursuant to Section 30 (E) of the National Internal Revenue Code of 1997, as amended. YOUR KIDS MY KIDS FOUNDATION, INC. for a T`ax Exemption Certificate This refers to your letter dated February 15, 2015 requesting on bchalf of

corporation duly organizcd and existing under the laws of the Republic of the incorporated are: No. OCN Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Company Registration No. Incorporation dated July 31, 2014; and that the purposes' for which the corporation was Taxpayer's Identification No. (TIN) It is represented that YOUR KIDS MY KIDS FOUNDATION, INC. with BIR dated August 20. 2014, is a non-stock. non-profit and with SEC Certificate of and Certificate ot Registration

To engage in social and religious activities for uplifiment of poor and marginalized Filipino youth, and to this end, estahlish, support operate youth centers, nutrition centers: grant scholarship and other forms of assistance through non-profii projects: underprivileged; assist the youth, fight juvenile delinquency and community deterioration; develop skills for greuter employment opportunities and higher standard of living: establish. maintain und and operute any religious charitable, benevolent, scientific, social. eduational. literury. recreational activities which will directty or indirectly provide moral and material assistunce to the poor und the

2 To own, purchase, ucquire, hold, sell. lease. exchange, mortguge the' profitable exploitation of its properties." subject to such land. huildings, real, personal and intangible properties: to receive donations, grants, gifis, bequests and legacies as the objectives and purposes of the corporation may requires and to generate funds for limitarions and restrictions as may he prescribed by law;

3 To solicit, receive, hold and administer property, real or personal. donated, devised or granted to it, including those that may be given in trust for any of the ubove-mentioned purposes:

' Article Hl. Articles of Incorporation of Youf Kids My Kids Foundation. Ine.

YOUR KIDS MY KIDS FOUNDATION. INC. 12-6-2017 2C 17

4. To collect. invest and reinvest all money and income coming to it and hold the same .for the pursuance of the objectives Of the corporation:

5 To organize, conduct and carry on any activity whatsoever which is.

necessary for or incidental to the purposes: and

6 To cooperate and collaborate with government institutions. other

communities involved in undertaking projects consistent with the purposes of the foundation. non-governmental organizations. groups.associutions ana

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

necessary annual information return instead of an income tax return on or before the fifteenth (15th) day of the fourth (4th) month following the end of its taxable year as required under Section 24 of Revenue Regulations No. 2-40 dated February 10, 1940.2 Based on such information return. we shall conduct the necessary investigation on the issued depending upon the result of our investigation. activities undertaken during the period. The letter of exemption shall thereafier be In the meantime. YOUR KIDS MY KIDS FOUNDATION, INC. can file the

corresponding 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 personai, or any activity conducted for profit rcgardless of thc disposition thereof bank deposits and yield or any other monetary benefits from deposit substitute instruments and from trust funds and similar arrangements. and royalties derived from the National Internal Revenue Code of 1997, as amended. (BIR Ruling No. 444-2014 which income should be returned for taxation. Likewise, interest income from currency sources within the Philippines are subject to the twenty percent (20%) 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 7-1/2% final withholding tax pursuant to Section 27 (D)(1), in relation to Section 57 (A), both of dated October 30, 2014 Thus. YOUR KIDS MY KIDS FOUNDATION, INC. is subject to the

tax under Section 79'(A), Chapter XIII, Title II of the National Internal Revenue Code of 1997, as amended, as implemented by Revenue Regulations No. 2-98. as amended. of 1997, as amended, also as implemented "by Revenue Regulations No. 2-98. as employer and its employee receives compensation income subject to the withholding or if it makes income payments to individuals or corporations subject to the expanded INC. shall be constituted as withholding agent of the government if it acts as an anended withholding tax provided for in Section 57 (B) of the National Internal Revenue Code Also, it shouId be understood that YOUR KIDS MY KIDS FOUNDATION,

as amended, any provision of existing generai 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 Moreover, under Section 235 of the National Internal Revenue Code of 1997.

: (Collector vs. Sinco. G.R. L.-9276 dated October 23. 1956

YOUR KIDS MY KIDS FOUNDATIONINC #561-2017 12-6-2017

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

or sales or commercial 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 under Section 6(C in relation to Section 237 of the same Code /Revenue Memorandum Circular (RMC) No.76-2003] Hundred Pesos (PhP500.00 as prescribed in Section 236 (B of the National Internal Revenue Code of 1997,as amended.It is also required to issue duly registered receipts Furthermore,it is subject to the payment of the annual registration fee of Five

Value-Added Tax

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

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

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including transactions incidental thereto,by any person regardless of whether or not the person engaged therein is a non-stock, non-profit regular conduct or pursuit of a commercial or an economic activity private organization (irrespective of the disposition of its net income The phrase "in the course of trade or business" means the

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

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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. Accordinglyif YOUR KIDS MY KIDS FOUNDATION,INC.is engaged in

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

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

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

required to submit the following documents pursuant to Revenue Memorandum Order(RMO)No.20-2013 dated July 22,2013 after the three (3-year period,YOUR KIDS MY KIDS FOUNDATION,INC.is Finally, for purposes of securing a Certificate of Tax Exemption

. YOUR KIDS MY KIDS FOUNDATION. INC

A. Originul copy of application letter for issuance of Tax Exemption exemption/revalidation is being based. Ruling. The letter shall cite the particular paragraph of Section 30 of the NIRC of 1997, as amended, under which the application for

B. SEC C'ertified true copy of its Certificate of Incorporation:

C. SE( Certified frue copy of its latest Articles of Incorporation which must specifically include and clearly state the following provisions:

1. That the corporation is non-stock, non-profit.

2 That the primary purpose for which the corporation was created is one of those enumerated under Sec. 30 of the Tax Code of 1997, as amended:

3 That no part of the net income of the corporation shall inure to the benefit of any its members or private individual:

4 That the trustees of the non-profit corporation do not receive

any compensution: and

5. In case of dissolution. assets of the corporation shall be (Revenue Memorandum Circular No. 51-2014) transferred to a similar institution or to the government.

D. SEC Certified true copy of its latest Amended By-Laws:

E. Original copy of a Certification under Oath hy an executive officer of the corporation as to:

all previous amendments 1 changes in the Articles of changes, the Certification shall state this fact) Incorporation and By-laws: (If there are no amendments ?

2. manner of activities: and

3. the sources and disposition of income, if any. of the subject corporation.

F. Certified true copies of its Income Tax Returns or Annua! years of operation: Information Returns and Financial Statements for the last three (3)

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

H. Certified true copy of its BIR Certificate of Registration:

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

YOUR KIDS MY KIDS FOUNDATION, INC. : 5017 1C17

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

I. A full description of the past. present, and proposed activities of the corporation:

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

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

However, 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.

Very truly yours.

M&a

K-I-LMAT Commissioner of Internal Revenue CAESAR R. DULAY 011512

COPY FURNISHED:

REVENUE REGION NO.08 - Makati City Attention: Revenue District Office No. 48 -- West Makati