BIR Ruling [DA-432-00]

December 18, 2000 BIR RULING [DA-432-00] 30 DA-562-98 Franciscan Institute of Asia c/o St. Joseph College 295 E. Rodriguez Sr. Blvd. Quezon City Attention: Sr . Margaret Mary Bondoc Director Gentlemen : This refers to your letter dated March 13, 1996 indorsed to this Office by Assistant Regional Director Virginia P. Tomas on September 21, 1999 requesting in effect for exemption from the payment of the final withholding tax on your interest income from currency bank deposits. Documents show that the Franciscan Institute of Asia is a non-stock, non-profit organization; and it is registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 92260 dated October 9, 1995. In reply, please be informed that a foundation as contemplated under Section 30(E) of the Tax Code of 1997 is subject to the payment of income tax on income derived from any of its properties, real or personal or any activity conducted for profit regardless of the disposition thereof, which income should be returned for taxation. Accordingly, since interest income from currency bank deposits and yield or any other monetary benefit from deposit substitute instruments are income from personal property, said interest income are subject to the 20% final withholding tax pursuant to Section 27(D) in relation to Section 57(A) of the Tax Code of 1997. Moreover, your interest income derived under the expanded foreign currency deposit system are subject to a final withholding tax of 7% pursuant to Section 27(D)(1) in relation to Section 57(A) of the Tax Code of 1997. (BIR Ruling No. DA-562-98 dated December 9, 1998) Very truly yours, Commissioner of Internal Revenue (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group