BIR Ruling No. 190-83

November 15, 1983 BIR RULING NO. 190-83 Gentlemen : This refers to your request for exemption from the payment of income tax as well as from the donor's tax on donations made in your favor. It is represented that Mga Lingkod Bayan is a non-stock and non-profit corporation; that the purposes for which the corporation is formed are: (1) to engage in and carry on the civic activities that are being rendered by the government; (2) to give these civic activities the significance and direction aimed by the New Society; (3) to bolster the reforms enunciated, programmed and undertaken by the New Society; and (4) to assist the First Lady in her social welfare projects; that the Associations shall be maintained through contributions, donations, and/or endowments from the government or the public and such property or money as may from time to time be received or acquired by deed, grant, devise, bequest or otherwise. Based on the foregoing representations, this Office is of the opinion and so holds that Mga Lingkod Bayan is a civic league and operated exclusively for social welfare purposes as contemplated by Section 27(g) of the National Revenue Code, as amended. Accordingly, it is exempt from the payment of income tax in respect of income received by it and such organization, and therefore, need not file an income tax return concerning such income. However, it is subject to the corresponding internal revenue taxes imposed under the National Internal Revenue Code on its income derived from any of its properties, real or personal, or any activity conducted for profit regardless of the disposition thereof, which income should be returned for taxation . Moreover, it is required to file on or before April 15 of each year a profit and loss statement and balance sheet with the annual information return under oath, stating its gross income and expenses incurred during the year and a certificate showing that there has not been any change in its Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. Furthermore, since the Mga Lingkod Bayan is a social welfare organization, donations made in its favor are exempt from the donor's gift tax pursuant to Section 123(a)(3) of the Tax Code, as amended, subject to the condition that not more than thirty (30%) per cent of said gifts shall be used by the donee for administration purposes. It is requested that a copy of this letter of exemption be attached to the annual information return which you file on or before April 15 of each year. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue