Claretian Communications Foundation, Inc.

May 7, 2009 BIR RULING [NSNP-(S30E-052) 305-09] Section 30; BIR Ruling No. S30-080-2007 Claretian Communications Foundation, Inc. 8 Mayumi St., U.P. Village, Diliman Quezon City Attention: Ms. Ma. Susana C. Basmayor Corporate Secretary Gentlemen : This refers to your letter dated November 3, 2008 requesting for a certificate of tax exemption in favor of Claretian Communications Foundation, Inc. (CCFI). Documentary evidence submitted disclosed that CCFI is a non-stock, non-profit religious and charitable corporation registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CN112588. Its purposes are as follows: "1. To promote an integrated program of implementing religious, social and charitable aims and plans with the objective of widely disseminating the word of God, especially in less fortunate areas of the Philippines, and elsewhere in Asia, and in the enrichment of the spiritual lives of man, thus assuring the greater glory of God. 2. To prepare, compile religious information of all kinds which may be useful in furthering the program of extending aid and support to their religious missions of the Roman Catholic Church, availing of all resources, private or public, local or foreign and coordinating efforts and means with the government agencies or instrumentalities concerned or created for such purposes. 3. To extend moral and material support to the religious missions in the Philippines and in other parts of the world; publish authentic and pertinent information regarding resources, opportunities and assistance and projects wherever the same may be found, including the procurement, manufacture, sale and distribution of religious artworks, religious audio-visual materials and the development of computer software and training programs primarily for the religious, charitable, cultural, and research purposes as well as for the upliftment of the economic life of the poor and unemployed and in support of the missionary aims and goals of the Claretian missionary priests throughout the world. 4. To print religious books, journals, magazines, periodicals, tracts and similar articles or materials for distribution and in aid of this purpose, to create and maintain such establishments such as bookstores, printing press, convent, stores and the like; xxx xxx xxx" In reply, please be informed that under Section 30 (E) of the Tax Code of 1997, as amended, a non-stock corporation or association organized and operated exclusively for religious, charitable, scientific, athletic, or cultural purposes, or for the rehabilitation of veterans, no part of its net income or asset shall belong to or inure to the benefit of any member, organizer, officer or any specific person is exempt from income taxation. IcCATD Accordingly, as a non-stock, non-profit charitable organization, CCFI, therefore, is exempt from tax on all revenues derived in pursuance of its purpose as a religious and charitable organization and used actually, directly and exclusively for religious and charitable 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. Moreover, as a tax-exempt organization, CCFI 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. cSTCDA Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service