BIR Ruling

June 9, 1976 Heart of Jesus Promotion Center, Inc. 1310 Belen cor. Perez Streets Paco, Manila Attention: Mr . Julian A . La ' o Gentlemen : This refers to your application for qualification as a donee or legatee entitled to the benefits of Presidential Decree No. 507. cd The documentary evidence submitted by you show that the Heart of Jesus Promotion Center, Inc. is a non-stock, non-profit corporation, duly registered with the Securities and Exchange Commission; and that the purposes for which the corporation is formed are to enhance and promote the cultural, moral, religious and social values of the Filipino people by coordinating and financing the activities of institutions, organizations and movements endeavoring to promote knowledge of, love for, and authentic cult of the Heart of Jesus; to provide a coordinating service, including financing for all Heart of Jesus activities of pastors, theologians, artists, scholars and apostolic groups; to solicit donation in cash or in kind and to hold title to any property and to collect income therefrom, which donation, property and income including the proceeds of any sale of the whole or part of the property, are to be used exclusively for the purpose for which said corporation is organized as it shall so determine and decide, such that no part of the donation, property or income shall inure to the benefit of any member of this corporation. Based on the foregoing, this Office is of the opinion that the Heart of Jesus Promotion Center, Inc. is essentially a religious organization. Although the organization may be undertaking cultural activities, such undertakings are merely incidental to the purpose for which it was organized, which is religious. (See BIR Ruling No. 75-001 dated January 14, 1975). Such being the case, it is not qualified to avail of the benefits provided under Presidential Decree No. 507, which specified only three kinds of organization, namely: charitable, cultural and social welfare organizations as defined in Section 3 of Revenue Regulations No. 8-74 dated September 24, 1974 implementing Presidential Decree No. 507. However, donations to that organization are exempt from the donor's gift tax, pursuant to Section 112(a)(3) of the Tax Code, as amended by Presidential Decree No. 69, provided that not more than 30% of said donations are used by the donee for administration purposes. Moreover, contributions to that organization are deductible from the gross income of the contributor, subject to the 6% or 3% limitation, in accordance with Section 30(h) of the Tax Code. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3