Exemption of Financial Supports from Philippine Income Tax

April 6, 1990 BIR RULING NO. 054-90 21 000-00 054-90 Gentlemen : This refers to your letter dated May 2, 1989 requesting a ruling as to whether the financial supports received by the CBM foreign missionaries are subject to Philippine income tax. It is represented that the Conservative Baptist Foreign Mission Society (CBM) is a duly registered foreign corporation licensed to do business in the Philippines; that it is a non-stock, non-profit, tax-exempt religious organization; that the CBM recruits missionaries from different countries, such as the U.S.A. whom they send to foreign mission fields such as the Philippines; that at present, the CBM has 79 foreign missionaries throughout the Philippines, in over 300 churches, chapels and mission stations; that to insure that they do not become a financial liability here, the CBM guarantees all their financial supports for as long as they are in the Philippines; that these foreign missionaries raised their financial supports prior to coming to the country from their friends, churches and relatives who may give in cash, cheques or mere pledges addressed not to the CBM, but to the individual missionary concerned; and that the funds are normally coursed through the CBM in the U.S.A. and then remitted to the CBM in the Philippines, to the account of the foreign missionary concerned. In reply thereto, I have the honor to inform you that since the financial supports being received by the foreign missionaries are not compensation and/or salary but donations which were given to them prior to their coming to the country; and that the funds are merely coursed through CBM U.S.A. and then remitted to CBM in the Philippines for the account of the foreign missionary, said financial supports are not, therefore subject to Philippine income tax. Very truly yours, (SGD.) JOSE U. ONG Commissioner