Edgardo S. Trota Memorial Foundation

June 24, 2010 BIR RULING [NSNP-(S30E-013) 057-10] Sec. 30 (E); BIR Ruling No. DA-045-01; BIR Ruling No. DA-502-06 Edgardo S. Trota Memorial Foundation Max's Baclaran Building, Baclaran Roxas Boulevard Paraaque City Attention: Mr. Armando F. Orcena Executive Secretary Gentlemen : This refers to your letter dated March 18, 2010 requesting for exemption from the payment of income tax and the filing of the corresponding income tax return under Section 30 (E) of the Tax Code of 1997. ISCaTE Documents submitted to this Office disclosed that the EDGARDO S. TROTA MEMORIAL FOUNDATION is a non-stock, non-profit charitable corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. A200113217 dated September 18, 2001 with Tax Identification No. (TIN) 213-910-492-000; that the purpose(s) for which the corporation was formed, among others, are as follows: 1. To sponsor, support, promote, encourage and finance educational activities and projects; conduct or otherwise support, fund and provide ways and means to give educational scholarships, travel grants, seminars, lectures, conferences, meetings and exhibitions calculated to attain that purpose; 2. To raise funds for the activities of the Foundation by donations, gifts, benefits, presentations, and other lawful sources and means; 3. To sponsor, support, promote, encourage and finance charitable activities and projects in order to carry out its objectives; that no part of the income which the corporation may obtain as an incident to its operation shall be distributed as dividends to its members, trustees or officers; and that upon dissolution, the existing assets of the corporation shall be passed on to another accredited corporation established for similar purposes or to continue the vision/mission. Based on the foregoing, this Office is of the opinion and so holds that the Philippine Constitution Association (Foundation), Inc. is a corporation organized for charitable 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. It should be understood that the * as a non-stock, non-profit corporation, it shall be constituted as withholding agent of the government if it acts as an employer and its employee receives 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, as amended, or if it makes income payments to individuals or corporations subject to the expanded withholding tax provided for in Section 57 (B) of the Tax Code of 1997, also as implemented by Revenue Regulations No. 2-98, as amended. HEcIDa However, it is subject to the corresponding internal revenue taxes imposed under the National Internal Revenue Code 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 benefits 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, EDGARDO S. TROTA MEMORIAL FOUNDATION is required to file on or before the 15th day of the fourth month following the close of its accounting period a Profit & Loss Statement and Balance Sheet with the Annual Information Return under oath, stating the gross income and expenses incurred during a given taxable year. Finally, EDGARDO S. TROTA MEMORIAL FOUNDATION's books of accounts and other pertinent records shall be subject to periodic examination by the Bureau for the purpose of ascertaining whether it has complied to the conditions under which it may be granted tax exemption or tax incentives and/or has paid its liability, if any, pursuant to Section 235 of the Tax Code of 1997, as amended. Very truly yours , (SGD.) GREGORIO V. CABANTAC Deputy Commissioner Legal & Inspection Group