BIR Ruling

April 3, 1973 Operation Brotherhood International, Inc. 2341-A Herran St., Sta. Ana Manila Attention: Mr . Luis Jose President Gentlemen : This refers to your letter dated March 26, 1973 requesting for a ruling as to whether or not Operation Brotherhood International, Inc. is subject to the payment of the 3% contractor's tax under Section 191 of the Tax Code, as amended Presidential Decree No. 69. cdt It is represented that the abovenamed corporation (CBI) is a non-stock and non-profit operations only registered with the Securities and Exchange Commission; that its articles of incorporation states that its objectives, among others are: "1. To promote and foster international understanding and goodwill for the Philippines through a program of assistance in the field of medicine, public health and socio-economics for depressed areas, particularly in neighboring countries of Southeast Asia; "2. To enter into contracts of services with foreign governments, its departments or agencies thereof, or with other individuals, entities or associations established abroad to enlist their financial and material support to these undertakings." that in pursuance of the above-cited objectives, CBI entered into contracts with the US AID Mission in Laos whereby it will provide assistance in medical care and in the development of public health and social welfare services in the kingdom of Laos that it shall also train Laos medical auxillaries at all hospitals and dispensaries which it operates for Laos Government for the purpose of qualifying such personal to assure technical and supervisory responsibilities, that the contract is for an initial period of one year, renewable every year by mutual agreement of the contracting parties and that for medical and public health services in Laos, CSI will receive a management fee to pay the salaries of its Manila personnel and to find its Philippines projects. In reply, I have the honor to inform you that under the foregoing circumstances and considering that the aforementioned services will be rendered outside the Philippines, your corporation is not liable to the 3% contractor's tax imposed under Section 191 of the Tax Code, as amended by Presidential Decree No. 69. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue