BIR Ruling [DA-208-04]

April 12, 2004 BIR RULING [DA-208-04] Secs. 105, 106, 108 005-2000 United Evangelical Church of the Philippines 1170 Benavides Street, Manila Attention: Lim Tin Chong Corporate Secretary Gentlemen : This refers to your request for exemption from the value added tax as a non-stock, non-profit organization. Based on records forwarded to this Office by the Regional Director of BIR Region No. 6, Manila, it appears that the United Evangelical Church of the Philippines (formerly United Evangelical Church of Manila) is a holder of SEC Registration Certificate No. 588; and that the objects and purposes for which it was formed, as shown in its original Articles of Incorporation, are: "1. To establish mission churches in the City of Manila and in all the provinces forming the Philippine Islands and in connection therewith suitable and customary organizations, for the purpose of public worship and religious training, according to the rules and discipline of said church, under the supervision of the Board of Directors; 2. To take charge of the church buildings, estates, properties, and affairs of the temporalities thereof; 3. To receive loans, gifts; 4. To acquire, possess, and hold title to real, personal and mixed states, either in trust or otherwise, by gift, bequest, device, or purchase, and to have the power to sell and convey the same by such instrument of conveyance as may be suitable." In reply, please be informed that pursuant to Section 105 of the Tax Code of 1997, any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods, shall be subject to the value-added tax imposed in Section 106 and 108 of this Code. Accordingly, if you will engage in the sale of goods or properties, or sale of services and use or lease of properties or import goods, you shall be subject to the 10% VAT. However, since the value-added tax is an indirect tax, the amounts of tax may be shifted or passed on to you if you are the buyer, transferee or lessee of the goods, properties or services which shall form part of the cost of the goods sold or services rendered. (Section 105, Tax Code of 1997, supra ) ( VAT Ruling No. 005-00 dated January 27, 2000 citing VAT Ruling No. 201-90 in relation to VAT Ruling No. 013-89 ) Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group