BIR Ruling No. 294-11

August 12, 2011 BIR RULING NO. 294-11 Section 27 (D) (1) of the Tax Code of 1997; Department Order No. 149-95; Finance Department Order No. 137-87; BIR Ruling No. ENPS-12-98; BIR Ruling No. DA-373-04; BIR Ruling No. ENPS004-96 Philippine National Bank Trust Banking Group-BDD Gentlemen : This refers to your letter dated April 5, 2011 requesting for revalidation of the exemption from the 20% and 7.5% final taxes on interest income from local bank deposits and foreign currency deposits of Sisters of Mary of Banneux, Inc. a non-stock, non-profit educational institution. In reply thereto, please be informed that the exemption of the above-mentioned school from payment of the 20% final tax and 7-1/2% tax on interest income under the expanded foreign currency deposit system imposed under Section 27 (D) (1) of the Tax Code of 1997, as amended, and as provided for under Department Order No. 149-95 dated November 24, 1995, amending Finance Department Order No. 137-87, REMAINS VALID AND SUBSISTING, subject to the compliance with the conditions that as a tax exempt educational institution it shall, on an annual basis, submit to the Revenue District Office concerned an annual information return an duly audited financial statements together with the following: (a) Certification from its depository banks as to the amount of interest income earned from passive investments not subject to the 20% or 7.5% final tax imposed under Section 24 (e) of the Tax Code, as amended [now Section 27 (D) (1) of the Tax Code of 1997]; (b) Certification of actual utilization of the said income; and (c) Board Resolution by the school administration on proposed projects ( i.e. , construction and/or improvements of school buildings and facilities, acquisition of equipment, books and the like) to be funded out of money deposited in banks or placed in money markets. (BIR Ruling No. ENPS004-96 dated February 7, 1996) aSECAD Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue