BIR Ruling [DA-455-05]

November 10, 2005 BIR RULING [DA-455-05] Third World Eye Care Society 2453 Commercial Drive, Vancouver BC Canada Attention: Dr. Marina Roma-March President Gentlemen : This refers to your letter dated September 30, 2005 requesting exemption from the value added tax on your donated eye glasses from British Columbia to be used in your medical mission. It is represented that the Third World Eye Care Society (Society) is a registered non-profit charity that is 100% volunteer group based in British Columbia; that you are a group of medical doctors, eye doctors, opticians and general volunteers from the Society who travel to developing countries to provide free eye care and eye glasses to the poor in the Third World; that the Society has been invited by the Mayor of Tacloban, Leyte to conduct an eye care mission for the poor in the barrios of Tacloban from November 12 to 26, 2005; that the Society will be working with the Rotary Club of San Juanico and the City Hospital of Tacloban; that it has a team of 14 medical, doctors, eye doctors and opticians for this eye care mission; that each member will be responsible for their airfare and accommodations; that all the eyeglasses they will be bringing are used and donated by compassionate British Columbians; that all the eyeglasses and equipment to be used and not given away will be brought back by your team to Canada to be used for their next project to Kenya, Africa; that since the Society is a non-profit organization, it has no funds to pay for duty or tax on your eye glasses and equipment; and that you sent a supplemental letter dated November 7, 2005 stating that the donated eyeglasses have no monetary value, as they will not be sold, resold or exchanged for profit. In reply, please be informed that the donations made by the Society to the barrios of Tacloban are 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 any of its agencies which is not conducted for profit, or to any political subdivision of the said Government shall be exempt from tax. (BIR Ruling No. 021-96 dated February 21, 1996) The importation, however, of the said eye glasses shall be subject to the Value Added Tax pursuant to Section 107(A) of the Tax Code of 1997. However, since based on your supplemental letter the shipment has no monetary value, no value-added tax can be derived or computed since the tax base is zero. 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 as null and void. cETCID Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service