Victory Churches of Asia

January 7, 2009 BIR RULING [NSNP-(S30E-002) 005-09] 30 (E); 79-98 Victory Churches of Asia No. 30 L & G Building Bristol Street, North Fairview Quezon City Attention: Rev. Luningning Conte Associate Pastor Gentlemen : This refers to your letter dated July 10, 2007, which was referred to this Office by Revenue District Office No. 28, Quezon City, by way of its 1st Indorsement dated July 25, 2007, requesting a ruling that the VICTORY CHURCHES OF ASIA INCORPORATED is exempt from the payment of income tax and the filing of the corresponding income tax return pursuant to Section 30 of the Tax Code of 1997. AIDTHC Documentary evidence submitted to this Office disclosed that the VICTORY CHURCHES OF ASIA INCORPORATED is a non-stock, non-profit religious corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CN200254410 dated August 30, 2002; and that the primary purpose for which it is organized are as follows: 1. To declare that the Christian church exists and functioning into its various ministries. These ministries include the propagation of the gospel of Christ through numerous means, including literature distribution, radio and TV ministries, evangelistic crusades etc. The church also exists to uplift the lives of the poor and needy through various projects; 2. To uplift the spiritual growth of all members and lead them to maturity in their Christian walk; and 3. To transact and negotiate to other organizations, religious, and secular pertaining to its program and ministries. Based on the foregoing, this Office is of the opinion and so holds that the VICTORY CHURCHES OF ASIA INCORPORATED is a corporation organized for religious purposes as contemplated under Section 30 (E) of the Tax Code of 1997. Accordingly, it is exempt from the payment of income tax on income received by it as such organization, and therefore, need not file an income tax return concerning such income. However, it is subject to the corresponding internal revenue taxes imposed under the Tax Code of 1997 on its income derived from any of its properties, real or personal, or any 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 substitute instruments and from trust funds and similar arrangements, 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 27 (D) (1) in relation to Section 57 (A), both of the Tax Code of 1997. Moreover, it is required to file on or before the 15th day of the fourth month following the end of the accounting period a Profit and Loss Statement and Balance Sheet with the Annual Information Return under oath, stating its gross income and expenses incurred during the preceding period and a certificate showing that there has not been any change in its By-laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. CEHcSI It is requested that a copy of this letter of exemption be attached to the annual information return which your corporation will file on or before the 15th day of the fourth month of each year. Under Section 235 of the Tax Code of 1997, any provision of existing general and special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organization 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. It should be understood that the said exempt organization shall be constituted as a withholding agent for the government if it acts as an employer and its employees receive compensation income subject to the withholding tax under Section 79 (A), Chapter XIII, Title II of the Tax Code of 1997, as implemented by Revenue Regulations No. 2-98, or if it makes income payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the Tax Code of 1997, as implemented by Revenue Regulations No. 2-98, as amended. (BIR Ruling No. DA-S-30-79-98 dated December 29, 1998) . 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. EcTCAD Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service