BIR Ruling [DA-046-05]

January 28, 2005 BIR RULING [DA-046-05] Section 101 (A) (2) DA-012-2003 Quezonian Foundation, Inc. (QFI) 300 Haddon Circle, Vernon Hills, Il 60061, USA Attention: Mr. Efren T. Catalla Chairman Gentlemen : This refers to your letter dated August 14, 2004 requesting exemption from the value added tax your donated medicine and medical supplies from the Netherlands and the United States. It is represented that the Quezonian Foundation, Inc. (QFI) is a Not for Profit organization recognized by the Internal Revenue Service under Code Section 501(c)(3); that it is also recognized by various not for profit organizations in the United States that assist you in obtaining medicines and medical supplies from the United States and The Netherlands; that in the Philippines, your programs/projects include college scholarships for poor but deserving students, assistance to communities and victims of natural disasters, support various projects of the Philippine Department of Education, donate books, sponsor Medical Missions and other various projects to those who are most in need; that the medicines and medical supplies from the United States are shipped via your regular flight forwarders "Balikbayan Boxes" to the Philippines, while your supplies from the Netherlands are shipped via postal office or the most economical ways of shipment; that your concerns are, the medicines and medical supplies from the Netherlands; that in your last two shipments, your goods were not delivered to the consignee, instead, you had to pick them up from the Bureau of Customs Office in Fort Bonifacio; that in other instances, you personally had to pick up your supplies one day before the mission starts; that last year, one of your volunteers went to Fort Bonifacio to pay the necessary VAT on your donated medicine and medical supplies; and that you are doing everything in complying with all the necessary requirements. In reply, please be informed that the donations made by you is exempt from donor's tax in view of Section 101(A)(2) of the Tax Code of 1997, which provides that gifts made to or for the use of the National Government or any entity created by its agencies which is not conducted for profit, or to any political subdivision of the Government shall be exempt from tax. (BIR Ruling No. 021-96 dated February 21, 1996) The importation, however, of the said medicine and medical supplies shall be subject to the Value Added Tax pursuant to Section 107(A) of the Tax Code of 1997. In the case of books, the importation shall be exempt from the VAT pursuant to Section 109(y) of the Tax Code of 1997. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group