The Evangelists' and Preachers' Council, Inc.

January 16, 2020 BIR RULING NO. S30E-010-2020 Section 30 (E) of the NIRC of 1997, as amended; RMO No. 20-2013; RMC No. 051-14; BIR Ruling No. 466-2014 The Evangelists' and Preachers' Council, Inc. Bogo, Pagadian City 7016 Attention: Cipriano Carpentero, Jr. President Gentlemen : This refers to your letter dated January 21, 2015, applying on behalf of THE EVANGELISTS' AND PREACHERS' COUNCIL, INC. for tax exemption certificate being enjoyed by non-stock, non-profit corporation or association under Section 30 (E) of the National Internal Revenue Code (NIRC) of 1997, as amended, which was forwarded to this Office by Revenue Region No. 15, Zamboanga City, dated May 22, 2015. DETACa It is represented that THE EVANGELISTS' AND PREACHERS' COUNCIL, INC. with BIR Taxpayer's Identification No. (TIN) _______________ and Certificate of Registration No. _______________ dated September 17, 2008, is a non-stock, non-profit association duly organized and existing under the laws of the Republic of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Company Registration No. __________; and that the purposes 1 for which it was incorporated are the following: 1. To assist local churches of Christ in acquiring a legal personality for the purpose of administering their temporaries, when requested to do so; 2. To assist evangelists and/or preachers of the local congregation in procuring credentials such as license or other certificate of identifications; 3. To acquire, accept donations or gifts, own, hold, develop, in any manner permitted by law, real or personal property of any kind and description, or any interest therein as may be necessary for the accomplishment of the purposes of the association; 4. To do all other acts necessary or expedient for the administration of the affairs and the attainment of the objectives and the purposes of the said corporation, which shall appear conducive thereto, or expedient therefore, unless the objective or purposes to be attained and the methods of its attainment is contrary to the scriptures. HEITAD In reply, please be informed that Section 30 of the National Internal Revenue Code of 1997, as amended, enumerates the non-stock and/or non-profit corporations/associations/organizations that are exempt from income tax in respect to income received by them as such. Section 30 (E) of the National Internal Revenue Code of 1997, as amended, provides, viz. : "Sec. 30. Exempt from Tax on Corporations. The following organizations shall not be taxed under this Title in respect to income received by them as such: xxx xxx xxx (E) Nonstock corporation or association organized and operated exclusively for religious, charitable, scientific, athletic, or cultural purposes, or for the rehabilitation of veterans, no part of its net income or asset shall belong to or inure to the benefit of any member, organizer, officer or any specific person"; xxx xxx xxx Section 30 (E) exempts from income tax non-stock corporations or associations organized and operated exclusively for religious, charitable, scientific, athletic, or cultural purposes, or for the rehabilitation of veterans, no part of its net income or asset shall belong to or inure to the benefit of any member, organizer, officer or any specific person. Revenue Memorandum Circular (RMC) No. 64-2016 has clarified that in order for an entity to qualify as a non-stock and/or non-profit religious institution, exempt from income tax under Section 30 of the National Internal Revenue Code of 1997, as amended it must be organized and operated exclusively for religious purposes. Religious purpose, as defined by RMC No. 64-2016, refers to the promotion, propagation and accomplishment of any form of religion, creed or religious belief recognized by the Government of the Republic of the Philippines. As per Amended Articles of Incorporation of THE EVANGELISTS' AND PREACHERS' COUNCIL, INC. , the purpose for which it was organized does not appear to be operated exclusively for religious purposes. Thus, THE EVANGELISTS' AND PREACHERS' COUNCIL, INC. cannot be qualified as a non-stock, non-profit corporation under Section 30 (E) of the National Internal Revenue Code of 1997, as amended. Please bear in mind that, "being a non-stock and/or non-profit corporation does not, by this reason alone, completely exempt an institution from tax." 2 Thus, "statutes granting tax exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of tax exemption must be clearly shown and based on language in law too plain to be mistaken. Otherwise stated, taxation is the rule, exemption is the exception. The burden of proof rests upon the party claiming the exemption to prove that it is in fact covered by the exemption so claimed." 3 (BIR Ruling No. 466-2014 dated November 19, 2014) The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed. In case of doubt, non-exemption must be favored. Taxes being the lifeblood of the government that should be collected without unnecessary hindrance, every precaution must be taken not to unduly suppress it. aDSIHc In view of the foregoing, the request of THE EVANGELISTS' AND PREACHERS' COUNCIL, INC. to be exempted from income tax on its income as a Section 30 (E) corporation is hereby denied as it failed to prove that it is a non-profit corporation. Therefore, THE EVANGELISTS' AND PREACHERS' COUNCIL, INC. shall be treated as an ordinary corporation subject to thirty percent (30%) income tax rate pursuant to Section 27 (A) and other internal revenue taxes imposed by the National Internal Revenue Code of 1997, as amended. Please be guided accordingly. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Amended Articles of Incorporation adopted on January 23, 2014. 2. CIR vs. St. Luke's Medical Center, Inc. [G.R. No. 195909 & G.R. No. 195960, 26 September 2012]. 3. Quezon City and the City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation [G.R. No. 166408, 6 October 2008].