Philippine Neurological Association, Inc.

February 3, 2009 BIR RULING [NSNP-(S30C-003) 062-09] Section 30 Philippine Neurological Association, Inc. Rm. 1006 10th Floor-North Tower, Cathedral Heights Bldg. Complex St. Luke's Medical Center E. Rodriguez Avenue Quezon City Attention: Mr. Herminigildo H. Gan Corporate Secretary Gentlemen : This refers to your letter dated December 2, 2008 requesting for a certificate of tax exemption. Documentary evidence submitted disclosed that Philippine Neurological Association, Inc. (formerly, Neurological Association of the Philippines, Inc.) is a non-stock, non-profit scientific corporation registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 49129. Its purposes are as follows: "1. To represent and further the professional interests of practitioners of Neurology and the allied professions, serve as an outlet for the expression of their professional opinions and in general provide an organization through which members may seek mutual assistance on professional, technical and economic matters; 2. To maintain a high standard of practice of neurology in the Philippines; 3. To outline the scope of neurological practice and to further recognition of this cope in the profession of medicine and among medical schools; 4. To establish a Specialty Board of Neurology for the purpose of certifying professional competence in the practice of neurology; CaSAcH 5. To foster cordial relations among all members of the neurological and allied professions; 6. To help establish, standardize, advance, evaluate and accredit residency training programs in neurology in the Philippines; 7. To periodically determine the neurological manpower needs of the Philippines and to provide for these needs by encouraging graduates in medicine to enter this field of specialty; 8. To encourage and foster the development and upgrading of research in neurological sciences in the Philippines; 9. To contribute to the evaluation, upgrading and updating of the teaching of neurological sciences in Philippine schools of medicine; 10. To undertake such other activities as are appropriate for the advancement of the neurological sciences; 11. To represent the Philippines in foreign conferences involving neurology." In reply, please be informed that under Section 30 (C) of the Tax Code of 1997, as amended, a non-stock corporation or association organized and operated exclusively for the benefit of the members is exempt from income taxation. Accordingly, as a non-stock, non-profit beneficiary organization, Philippine Neurological Association, Inc., therefore, is exempt from tax on all revenues derived in pursuance of its purpose as a scientific organization and used actually, directly and exclusively for scientific purposes. However, it is subject to internal revenue taxes on income from other activities the conduct of which is not related to the exercise or performance of its purposes or functions. Moreover it is subject to the corresponding taxes imposed under the Tax Code of 1997, as amended, on its income derived from any of its properties, real or personal, regardless of the disposition thereof, which income should be returned for taxation. Likewise, interest income from its currency bank deposits and yield or any other monetary benefits from deposit substitute instruments and from trust funds and similar arrangements received by the organization, and royalties derived from sources within the Philippines are subject to the 20% final withholding tax: provided, however, that interest income derived by it from a depository bank under the expanded foreign currency deposit system shall be subject to 7-1/2% final withholding tax pursuant to Section 28 (A) (7) (a), in relation to Section 57 (A), both of the Tax Code of 1997, as amended. ETDAaC Moreover, as a tax-exempt organization, Philippine Neurological Association, Inc. should file an annual information return on or before the 15th day of the 4th month following the end of its taxable year. Under Section 235 of the Tax Code of 1997, as amended, any provision of existing general and special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organizations or grantees of tax incentives shall be subject to examination by the BIR for purposes of ascertaining compliance with the conditions under which they have been granted tax exemptions or tax incentives, and their tax liabilities, if any. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service