BIR Ruling [DA-032-03]

February 4, 2003 BIR RULING [DA-032-03] Padilla Law Office 7/F Padilla-De Los Reyes Building 232 Juan Luna Street Binondo, Manila Attention: Atty. Sabino Padilla, Jr. Gentlemen : This refers to your letter dated May 31, 2002 stating that your client, Carmelite Missionaries of Quezon City, Inc. (Carmelite Missionaries), is a religious congregation for women of the Catholic Church, incorporated in the Philippines as a religious corporation sole; that the Congregation is engaged in administering a non-stock, non-profit school, organizing skills training and livelihood programs for the poor, and working in parishes and diocesan centers in the service of the Catholic Church; that the income of the Carmelite Missionaries comes from the work of the sisters in schools, parishes and diocesan centers and donations from benefactors here and abroad; that the law requires religious corporations that do not have any taxable income to file an annual information return; that when the corporation applied for a taxpayer identification number (TIN) required by the Information Return, it was required to register under Section 236 of the Tax Code, and that since it had never registered with the BIR, it was told to pay the registration fee for ten (10) years. In connection therewith, you now request for a ruling that since a non-stock, non-profit religious corporation whose income comes only from religious income, and not income on the sale of properties or activity conducted for profit, it is not subject to any internal revenue tax and consequently not required to be registered and pay the P500 annual registration fee in order to obtain a TIN. In reply thereto, please be informed that Section 236(A) and (B) of the Tax Code of 1997 provides that every person subject to any internal revenue tax shall register once with the appropriate revenue district officer; . . . and an annual registration fee in the amount of Five Hundred Pesos (P500) shall be paid upon registration and every year thereafter on or before the last day of January. Since a religious corporation is exempt from income tax under Section 30(E) of the Tax Code of 1997, it is exempt from the aforementioned BIR-registration requirements and consequently not required to pay the annual registration fee of P500.00 for purposes of securing a TIN. Accordingly, this Office holds that there is no basis for the BIR to require your client to pay the registration fee for a period of ten (10) years. ( BIR Ruling No. 159-98 dated November 11, 1998) HTAEIS Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group