BIR Ruling No. 415-12

June 25, 2012 BIR RULING NO. 415-12 Section 30 (H) of the Tax Code of 1997; BIR Ruling No. 166-11 Standard Chartered Bank Standard Chartered Bank Bldg. 6788 Ayala Avenue, Makati City Attention: Richard Chester Tamayo Head, Ortigas Branch Gentlemen : This refers to your letter dated May 17, 2012 requesting revalidation of the exemption from the 20% and 7.5% final taxes on interest income from local bank deposits and foreign currency deposits of Miriam College Foundation, Inc., a non-stock, non-profit educational institution. Documents submitted show that BIR Ruling No. ENPS-008-2000 dated February 21, 2000 was issued in favor of Miriam College Foundation, Inc., exempting it from the 20% final tax and 7.5% final tax on its interest income from local banks deposits and foreign currency deposits. The aforesaid tax exemption was revalidated by this Office in BIR Ruling No. 524-2011 dated December 22, 2011. In reply, please be informed that Miriam College Foundation, Inc., being a non-stock, non-profit educational institution, continues to be exempt from the payment of the 20% final tax and 7.5% tax on interest income derived from local and foreign currency money market placements, bank deposits, deposit substitutes, trust funds and/or similar or like arrangements or investments, 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, subject to the compliance with the conditions that as tax-exempt educational institution it shall on an annual basis submit to the Revenue District Office concerned an annual information return and duly audited financial statement together with the following: ICHDca (a) Certification from their depository banks as to the amount of interest income earned from passive investment not subject to the 20% final withholding tax and 7 1/2% tax on interest income under the expanded foreign currency deposit system imposed by 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 improvement of school buildings and facilities, acquisition of equipment, books and the like) to be funded out of the money deposited in banks or placed in money markets, on or before the 15th day of the fourth month following the end of its taxable year (Sec. 4, Finance Department Order No. 137-87). Under Section 4 of Finance Department Order No. 137-87, the information return should be filed annually on or before the 15th day of the 4th month following the end of the taxable year. However, Miriam College Foundation, Inc. shall be subject to internal revenue taxes on its income from trade, business or other activity the conduct of which is not related to the exercise or performance of its educational purpose or function (Section 2.1 of Finance Department Order No. 137-87, as amended by Finance Department Order No. 149-95). BIR Ruling No. 166-11 dated May 25, 2011 This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. cIDHSC Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue