Mission Society of the Philippines

August 10, 2009 BIR RULING [DA-(FIT-014) 451-09] Mission Society of the Philippines M.C.P.O. Box 1006 Makati City Attention: Rev. Fr. Patricio P. Casino, MSP Corporate Secretary Gentlemen : This refers to your letter dated March 19, 2009 requesting for an opinion that as a religious organization it is exempt from the payment of the 20% and the 7.5% final withholding taxes respectively imposed on interest from currency bank deposit and yield or any other monetary benefits from deposit substitutes and from trust funds and similar arrangement and interest income derived under the expanded foreign currency deposit systems prescribed in Section 27 (D) (1) of the Tax Code of 1997. TASCDI In reply thereto, please be informed that your request CANNOT be granted for lack of legal basis. It is to be noted that the last paragraph of Section 30 of the Tax Code of 1997 says so in many words that notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and character of the foregoing organizations from any of their properties, real or personal, or from any of their activities conducted for profit regardless of the disposition made of such income, shall be subject to tax imposed under this Code. Thus, as a non-stock, non-profit corporation or religious organization it is only exempt from taxes for which it is directly liable like income tax conversely income derived by the said organization from its personal property like bank deposits is subject to the final withholding tax prescribed in Section 27 (D) (1) of the Tax Code of 1997, as implemented by Revenue Regulations No. 2-98, as amended. SUCH BEING THE CASE, interest income derived from any currency bank deposit and yield or any other monetary benefits from deposit substitutes or expanded foreign currency deposit systems, by the said non-stock, non-profit corporation or religious corporation, is SUBJECT to the 20% or 7.5% final withholding tax, respectively. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service