Request for Exemption from the 20% Final Tax on Bank Deposits and on Donations Received from Abroad

November 25, 1994 BIR RULING NO. 160-94 26 101 000-00 160-94 Superior General of the Missionaries of the Child Jesus Amapola corner Estrella Streets Makati, Metro Manila Attention: Sr . Ma . Paz Duerme, MCJ Superior General Gentlemen : This refers to your letter dated July 9, 1994 requesting for exemption from the 20% final tax on your bank deposits and on donations you receive from abroad like medicines for your poor patients. cdta It is represented that you are a corporation sole organized for the purpose of holding title to the properties, real or personal, collecting income therefrom and turning over the entire amount thereof less expenses to churches, convents, retreat houses, colleges, schools, house of studies, relief or charitable houses, parsonages, youth centers, hospitals, seminaries, cemeteries, religious missions owned by the corporation in connection with its religious as well as for undertaking community development, scientific and sociological projects, youth development, health, social welfare, cultural or charitable activities. In reply thereto, please be informed that the last paragraph of Section 26 of the Tax Code, as amended, provides as follows: "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." Accordingly, since your bank deposits form part of your personal property, the income thereof consisting of interests is subject to income tax and consequently to the 20% final withholding tax. Moreover, the donations of medicines you received from abroad is subject to the value-added tax pursuant to Section 101 of the Tax Code. In view thereof, it is regretted that we cannot grant your requests for lack of legal basis. cdti Very truly yours, RENE G. BAEZ Acting Commissioner