Lingap Kawal Foundation, Inc.

March 3, 2009 BIR RULING [NSNP-(S30C-007) 163-09] 27 (D) (1); S-30-012-07 Lingap Kawal Foundation, Inc. c/o Villanueva Gabionza & De Santos Law Office 20th Floor, 139 Corporate Center Valero Street, Salcedo Village Makati City Attention: Ms. Dionette G. Aguilar-Eleazar Executive Director Gentlemen : This refers to your letter dated July 9, 2008, requesting for exemption from the payment of income tax and filing of the corresponding income tax return under Section 30 of the Tax Code of 1997, as amended. Documents submitted to this Office disclosed that Lingap Kawal Foundation, Inc. (Lingap Kawal) is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission under SEC Registration No. CN 200710245 dated June 29, 2007; and that the purposes for which Lingap Kawal is incorporated are the following: 1. To assist in providing free or affordable legal, medical, educational and other humanitarian services and assistance to members of the Armed Forces of the Philippines and their families; 2. To provide tertiary education scholarships for the children of members of the Armed Forces of the Philippines; 3. To provide livelihood programs for the spouses of the members of the Armed Forces of the Philippines; 4. To provide financial assistance to the members of the Armed Forces of the Philippines who were wounded in the line of duty; and 5. To provide assistance to members of the Armed Forces of the Philippines who were disabled in the line of duty in securing civilian employment/creating sources of livelihood. In reply, please be informed that this Office cannot yet issue the requested ruling/certificate of tax exemption. You have to prove by actual operation for at least three (3) years that you are really an organization/association exempt from income tax under Section 30 of the Tax Code of 1997, as amended. You can file the necessary annual information return instead of an income tax return on or before the 15th day of the fourth month following the start of your operation as an exempt organization as required under Section 24 of Revenue Regulations No. 2 ( Collector vs. Sinco, G.R. L-9276 dated 23 October 1956). Based on such information return, we shall conduct the necessary investigation on your activities undertaken during the period. The determination letter of exemption shall thereafter be issued depending upon the result of our investigation. DEScaT However, Lingap Kawal shall be subject to the corresponding internal revenue taxes imposed under the Tax Code of 1997, as amended, on income derived from any of its properties, real or personal, or activity conducted for profit regardless of the disposition thereof, which income should be returned for taxation. Likewise, interest income from currency bank deposits and yield or any other monetary benefit from deposit instruments and from trust funds and similar arrangements, and royalties derived from sources within the Philippines are subject to 20% final withholding tax; provided, however, that the interest income you derive from a depository bank under the expanded foreign currency deposit system shall be subject to a final withholding tax of 7 1/2% pursuant to Section 27 (D) (1) in relation to Section 57 (A) of the Tax Code of 1997, as amended. Moreover, you are required to file on or before the 15th day of the fourth month following the end of your accounting period Profit and Loss Statement and Balance Sheet with Annual Information Return under oath, stating your gross income and expenses incurred during the preceding period and a certificate showing that there has not been any change in your By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. It should be understood that Lingap Kawal shall be constituted as a withholding agent for the government if it acts as an employer and any of its employees receives compensation income subject to withholding tax, or if it makes payments to individuals or corporations subject to the withholding tax provided for in Section 57 of the Tax Code of 1997, as amended. Finally, your books of accounts and other pertinent records shall be subject to periodic examination by revenue enforcement officers of this Bureau for the purpose of ascertaining whether you have been complying with the conditions under which you may be granted tax exemption or tax incentives and tax liability, if any, pursuant to Section 235 of the Tax Code of 1997, as amended. This ruling is being issued on the basis of the foregoing facts as presented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. DTEcSa Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service