BIR Ruling No. 413-15

December 14, 2015 BIR RULING NO. 413-15 Revenue Bulletin 1-03; RMC 14-01 Global Peace Festival Foundation Philippines, Inc. 15J Torre De Venezia Condominium 170 Scout Santiago Street Cor. Timog Avenue, Quezon City Attention: Michael G. Zablan President Gentlemen : This refers to your letter dated May 7, 2013, indorsed to this Office by the Legal Division of Revenue Region No. 7-Quezon City on June 13, 2013, requesting for a certificate of tax exemption of Global Peace Festival Foundation, Philippines, Inc. and submitting machine copies of the following documents as proof of its operation as a non-stock non-profit organization: cHDAIS 1. Certificate of Incorporation issued by the Securities and Exchange Commission (SEC) under Company Registration No. CN200912578 dated August 14, 2009; 2. Page 1 of the Articles of Incorporation; and 3. Mayor's Permit issued January 25, 2013. In reply, please be informed that this Office cannot issue a determinative ruling on the above matter for lack of factual basis since foregoing request is considered a 'No Ruling Area' pursuant to Revenue Bulletin No. 01-03 which prescribes the procedure and guidelines for the proper handling of request for rulings which are determined hereunder as "no-ruling areas", and provides the initial list of "no-ruling areas". Pertinent provision of the Revenue Bulletin states: SECTION 2. List of No-Ruling Areas. The following shall hereby be construed and identified as "No-Ruling Areas": u) Request for rulings that are not accompanied by complete documents or information as provided in Revenue Memorandum Circular Nos. 39-2001 and 14-2001, Revenue Memorandum Order Nos. 32-2001, and 1-2000 in relation to BIR Form 0901 or where the relevant regulations or issuances specify. Since the letter request for tax exemption avers that the corporation operates as a non-stock non-profit organization, Global Peace Festival Foundation, Philippines, Inc. should have complied with the requirements of Revenue Memorandum Circular (RMC) No. 14-01 which was issued to expedite the issuance of certain rulings with established precedents by circularizing "Lists of Requirements from Taxpayers for Issuance of Certain Rulings with Established Precedents Delegated to Regional Directors and to the Assistant Commissioner, Legal Service under RMC Nos. 2-2001, 3-2001 and 10-2001" and enumerated the following documents to support the request: TAX EXEMPTION UNDER SECTION 30 OF THE TAX CODE OF 1997 1 a) Certificate of Registration with the Securities and Exchange Commission (SEC); b) Articles of Incorporation which must include the following provisions: i) that the corporation is non-stock, non-profit; ii) that the primary purpose for which it was created is one of those enumerated under Sec. 30 of the Tax Code of 1997; iii) that no part of the net income shall inure to the benefit of any of its members; iv) that the trustees do not receive any compensation; and v) in case of dissolution, assets of the corporation shall be transferred to similar institution or to the government. c) By-Laws; and d) Annual Information Return and Financial Statements for the last 3 years of operation unless the non-stock, non-profit corporation is newly incorporated. Considering that herein request is bereft of the factual bases to exempt Global Peace Festival Foundation, Philippines, Inc. , this Office resolves to deny the request, without prejudice to its re-filing with complete documents complying with the current requirements under Revenue Memorandum Order No. 20-2013 dated July 22, 2013 "Prescribing the Policies and Guidelines in the Issuance of Tax Exemption Rulings to Qualified Non-Stock, Non-Profit Corporations and Associations under Section 30 of the National Internal Revenue Code of 1997, as Amended" to support its claim for tax exemption under the provision of law it is invoking. It should be emphasized that "[L]aws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. Taxation is the rule and exemption is the exception. The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed. (Commissioner of Internal Revenue vs. Mitsubishi Metal Corporation, G.R. 80041, Jan. 22, 1990) Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue Footnotes 1. Superseded by Revenue Memorandum Order No. 20-2013 (July 22, 2013) "Prescribing the Policies and Guidelines in the Issuance of Tax Exemption Rulings to Qualified Non-Stock, Non-Profit Corporations and Associations under Section 30 of the National Internal Revenue Code of 1997, as Amended" .