Tax Liabilities of Revenue Information Systems Services, Inc.

February 7, 1984 BIR RULING NO. 028-84 24 (a)-000-00-028-84 Gentlemen : This refers to your letter dated December 16, 1983, stating that the Revenue Information Systems Services, Inc. (RISSI) is a non-stock, government-owned foundation and registered as such with the Securities and Exchange Commission on April 23, 1981; that to avoid the duplication of functions, Executive Order No. 873 dated February 19, 1983 was issued abolishing the Data Processing Center of the Bureau of Internal Revenue (BIR) and its functions as well as data processing activities for the BIR were taken over by the RISSI. Based on the foregoing facts, you now request information as to the tax liabilities of RISSI, if any. In reply, please be informed that pursuant to Section 1 of Executive Order No. 873 reading: "SEC. 1. The Data Processing Center of the BIR, together with the Regional Data Centers, are hereby abolished and their activities shall be contracted to free of tax and performed by the Revenue Information System Services, Inc. (RISSI), a wholly government-owned foundation: . . ." (Italics supplied) the tax exemption privilege of RISSI shall cover only its direct tax liabilities as may be imposed in connection with its functions and activities which are contracted and performed exclusively for the BIR but shall exclude such taxes as may be transferred or merely passed on to it; and those taxes imposed on account of services rendered to persons or entities other than the BIR, in which case, RISSI shall be subject, among others, to the corporate income tax prescribed by Section 24(a) and (g) of the Tax Code, as well as to the fixed annual tax of P100 and 3% contractor's tax prescribed by Section 192(1) and 205 of the same Code. However, as a government-owned foundation, RISSI is entitled to either a tax subsidy or payments constituting equity contributions, in which case, it shall not be required to pay cash or its equivalent. The revenue collecting agencies shall instead , issue a "Payment Compliance Certificate" indicating the nature of the assessment and amount due. The subsidy shall be effected through journal vouchers or their equivalent. (See Joint Budget Circular No. 289 and pars. 4, 6 and 9, Finance Circular No. 2-78 implementing Sec. 23, P.D. 1177) cdta Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner