BIR Ruling [DA-211-06]

April 5, 2006 BIR RULING [DA-211-06] Rev. Regs. No. 13-98 Philippine Council for NGO Certification 6/F, SCC Bldg. CFA-MA Compound 4427 Interior Old Sta. Mesa Road Sta. Mesa, Manila Attention: Ms. Fely I. Soledad Executive Director Gentlemen : This refers to your faxed letter dated October 18, 2005 requesting for opinion on whether Philippine Council for NGO Certification (PCNC) should still require a copy of the most recent BIR ruling or whether the past Certificate of Tax Exemption will suffice. As represented, one of PCNC's requirements from an applicant applying for renewal of its tax exemption as qualified-donee institution is that it submits a copy of its most recent BIR ruling. One organization applying for renewal of its tax exemption is asking for the rationale of such requirement when it has already submitted a copy of its Certificate of Tax Exemption issued under BIR-NEDA Regulations No. 1-81 effective April 30, 1981. In reply, please be informed that Section 5(e) of Revenue Regulations No. 13-98 provides for the purpose of requiring an applicant to submit a copy of its Certificate of Tax Exemption issued under BIR-NEDA Regulations No. 1-81. Under the said provision, existing non-stock, non-profit corporations/NGOs which have qualified as donee institutions under BIR-NEDA Regulations No. 1-81, as amended, shall have three (3) years beginning the effectivity of the said regulations within which to secure a Certificate of Accreditation from the Accrediting Entity (PCNC). The Certificate of Accreditation is a sine qua non requirement before the BIR can issue a Certificate of Registration that the NGO is a qualified-donee institution. Failure to secure accreditation within the 3-year period shall be a ground for cancellation by the BIR of its Certificate of Registration as a qualified-donee institution. On the other hand, an applicant who is requesting for a renewal of its tax exemption as donee institution must show proof that it has been previously granted a BIR ruling on such exemption which shall be the basis of its application for renewal. TDAcCa In view of the foregoing, this Office is of the opinion that an applicant who is requesting for a renewal of its tax exemption as qualified donee institution need not submit a copy of its Certificate of Tax Exemption issued under BIR-NEDA Regulations No. 1-81. However, for purposes of applying for renewal of its tax exemption as donee institution, it is necessary that it submits a copy of its most recent BIR ruling. Very truly yours, Commissioner of Internal Revenue By: (SGD.) PABLO M. BASTES, JR. OIC-Head Revenue Executive Assistant Legal Service