BIR Ruling [DA-514-05]

December 21, 2005 BIR RULING [DA-514-05] 24 (A); DA-072-2002 Picazo Buyco Tan Fider and Santos Law Offices 18th 19th & 17th Floors, Liberty Center 104 H.V. dela Costa St. Salcedo Village, Makati City Attention: Atty. Gabriel A. Dee Gentlemen : This refers to your letter dated November 25, 2005 requesting on behalf of your client, Grace Christian Church (GCC),for a confirmation on the exemption from withholding/income tax of their pastors, ministers, missionaries, evangelists and workers/staffs on the financial assistance and/or support they received, which comes exclusively from tithes, love gifts, offerings and donations given to GCC. It appears that GCC is a non-stock, non-profit religious organization duly registered with the Securities and Exchange Commission (SEC) on July 30, 1969 with SEC Registration No. 38959. It was organized primarily with the objective of preaching the Gospel to the community and the world and to minister to the spiritual needs of its members and the community, and it was incorporated for the administration of its temporalities or the management of its property or estates. Since its inception, it has relied solely on the voluntary offerings, tithes, love gifts and donations from the congregation and from other Christians who are supportive of the objectives of the church. A portion of the aforesaid donations, offerings, tithes and love gifts are then given to its pastors, ministers, missionaries, evangelists and workers/staffs as and by way of financial assistance for their necessary living expenses and by way of support and love gift. The pastors, missionaries, evangelists and workers/staff do not derive any other source of income or livelihood from the church except coming from such donations, offerings, tithes and love gifts. In reply, please be informed that if the pastors, missionaries, evangelists and workers/staffs will not derive any personal income except for the necessary support for their daily maintenance, said financial assistance and support are not subject to income tax prescribed under Section 24(a) of the Tax Code of 1997 considering that the said financial support is not compensation and/or salary but donations which were given to the congregation. Accordingly, they need not file income tax return. (BIR Ruling No. UN-377-95 dated October 17, 1995 citing BIR Ruling No. 082-94 dated April 4, 1994). This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. CITcSH Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service