BIR Ruling

February 9, 1972 Philippine Trade Unions Congress Lopez Building Aduana, Intramuros Manila Attention: Mr . Jose J . Hernandez General Secretary Gentlemen : This refers to your letter dated December 7, 1971 requesting reconsideration of our ruling dated November 3, 1971 subjecting to compensating tax the importation of one (1) crate of vitamins from New York which was donated to you by the UAW Solidarity Social Technical and Educational Program, Inc. of 1126-16th Street N.W. Washington D.C. for free distribution to the members of the Philippine Trade Unions Congress (PTUC). In support of your request for reconsideration, you stated that the elements of Section 1 of Republic Act No. 1916 fall directly to the instant case of the Philippine Trade Unions Congress since a donation has been effected and its distribution is for free to the members of the said Congress; that the Philippine Trade Unions Congress falls verily within the category of an established international civic organization since Article I of its constitution specifically provides the following: "xxx xxx xxx "(b) To provide a policy-making body for all these trade unions in all matters involving the workers in relation to the community, the nation and the rest of the world; "(c) To represent the free trade union movement of the Philippines in all international agencies and conferences affecting labor; "(d) To join and/or establish friendly relation with international organizations, both governmental and non-governmental, in programs intended to promote the interests of working people everywhere; "(e) To establish, maintain and develop, and provide assistance in the establishment, maintenance and development of free and democratic trade unions; "(f) To promote activities designed to organize mutual assistance among its members and affiliates; "(g) To work for full employment, improvement of working conditions and raising the standards of living of the people; "(h) To engage in and support labor educational programs for the purpose of developing responsible and intelligent leadership in the trade union movement; in promoting a better understanding of national and international problems confronting workers; and in educating workers for progressive participation in the administration and management of unions and responsibilities in industry and for the recognition of their duties and rights towards their unions, the community and their country; "xxx xxx xxx "(1) To work for the establishment and preservation of a just and democratic society free from anti-social concentration of economic and political power in any form." all of which aims and principles have been and are still being implemented not only for the benefit of Philippine Society but also international societies; that as further proof of its being an international civic organization or charitable society, or an institution for civic purposes, Article XII, Section 1 of its constitution states that the Council shall seek membership in the International Confederation of Free Trade Union, an international labor organization whose main objective is not only to promote the general welfare of the working class but also the societies in the various nations; and that the articles imported are donations for free distribution and not for barter, sale or hire. It also appears that the Philippine Trade Unions Congress is engaged in civic activities, like giving material aid to its members and calamity victims. That during the fire in Tondo on April, 1971, the PTUC has distributed free to some fire victims thereof, rice, sugar, milk and canned goods purchased out of a fund donated to it from abroad for the purpose by the International Confederation of Free Trade Union. In reply, I have the honor to inform you that in order that a donation may be exempted under Republic Act No. 1916, the following requirements must concur: (1) the imported articles must have been donated; (2) the donee must be a duly incorporated or established international civic organization, religious or charitable purposes; and (3) the articles so imported must have been donated for the use of the organization, society or institution or for free distribution and not for barter, sale or hire, (Commissioner of Internal Revenue vs. Church of Christ "New Jerusalem" G.R. No. L-15772, Oct. 31, 1961; Commissioner of Internal Revenue vs. Bishop of the Missionary District of the Philippine Islands of the Protestant Episcopal Church in the U.S.A., et. al., G.R. No. L-19445, August 31, 1965). From the documentary evidence presented, it appears that the aforementioned shipment of vitamins was donated from abroad; that the Philippine Trade Unions Congress is an international civic organization or charitable society; and that the vitamins imported are for distribution to the members of the organization and not for barter, sale or hire. In view of the foregoing, it is believed that the imported vitamins are exempt from the compensating tax pursuant to Republic Act No. 1916. Accordingly, our letter to you dated November 3, 1971 is hereby revoked. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue