Center for Media Freedom & Responsibility, Inc.

May 14, 2009 BIR RULING [NSNP-(S30E-055) 312-09] Section 30; BIR Ruling No. S30-080-2007 Center for Media Freedom & Responsibility, Inc. 2nd Flr. Ateneo Professional School 130 HV dela Costa St. Salcedo Village, Makati City Attention: Ms. Melinda Q. de Jesus Executive Director Gentlemen : This refers to your letter dated November 26, 2007 requesting for tax exemption. Documentary evidence submitted disclosed that Center for Media Freedom & Responsibility, Inc. ("CMFR" for brevity), with Taxpayer Identification No. 001-026-035-000, is a non-stock, non-profit scientific corporation registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 180101. Its sole purpose is "To promote, sponsor, organize and help maintain a continuing nationwide forum that will monitor and review the performance of print, broadcast, electronic and other media as agents for and influence factors in national development, pursuing its tasks primarily through publications, training programs, research projects, field surveys, studies, symposia, dialogues, educational campaigns, media surveys and monitors and similar or related activities". CMFR was organized and operates for the scientific study and evaluation of the media through research, and is engaged in educating young people as well as the public at large in understanding the media so that they may contribute to its development. 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. ITDSAE Accordingly, as a non-stock, non-profit scientific organization, CMFR, therefore, is exempt from tax on all revenues derived in pursuance of its purpose as a scientific organization and used actually, directly and exclusively for scientific 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, CMFR 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service