Association of Travailleuses Missionnaires, Inc.

January 26, 2009 BIR RULING [NSNP-(S30E-008) 031-09] Section 30 (E); S-30-027-2003 Association of Travailleuses Missionnaires, Inc. 1499 Paz Mendoza Guanzon Avenue Paco, Manila Attention: Sister Auda D. Mangaron Gentlemen : This refers to your letter dated August 27, 2008 requesting exemption from the payment of taxes pursuant to Section 30 of the Tax Code of 1997, as amended. cHEATI It is represented that Association of Travailleuses Missionnaires, Inc. is a non-stock, non-profit religious organization registered with the Securities and Exchange Commission under SEC Registration No. 97437; and that the religious organization manages L'Eau Vive Restaurant as part of your apostolate to generate funds to finance various religious and social work and as a vehicle and venue for its apostolate and missionary activities. Based on the foregoing, this Office is of the opinion and so holds that the Association of Travailleuses Missionnaires, Inc. falls within the purview of a non-stock, non-profit religious institution 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. However, it is subject to the corresponding internal revenue taxes imposed under the National Internal Revenue 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. The last paragraph of Section 30, particularly, does not leave any room for interpretation; hence, the income from any of the organization's properties is subject to tax under the Tax Code of 1997, as amended, regardless of the disposition made of such income. In relation to this, Section 30 of Revenue Regulations No. 2, as amended, provides, among others, that the income of such tax-exempt corporation which is considered as income from its properties, real or personal, includes profits from the management of the restaurant. In other words, the income generated from the management of the L'Eau Vive Restaurant is an activity conducted for profit, hence, subject to income tax. Regrettably, this Office is of the opinion that since Association of Travailleuses Missionnaires, Inc. manages a restaurant, the income from such activity is subject to income tax. HIaTDS Please be guided accordingly. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service