Munting Kawan ng Sagrado Corazon Foundation

June 11, 2009 BIR RULING [NSNP-(S30E-066) 373-09] Section 30; BIR Ruling No. S30-080-2007 Munting Kawan ng Sagrado Corazon Foundation Carael, Botolan Zambales Attention: Mr. Rene V. Ongpin President and BOT Chairman Gentlemen : This refers to your letter dated March 15, 2008, indorsed to this Office from BIR Revenue Region No. 4-San Fernando, Pampanga, requesting for tax exemption. Documentary evidence submitted disclosed that Munting Kawan ng Sagrado Corazon Foundation, Inc. is a non-stock, non-profit religious corporation registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CN200605151 dated March 31, 2006. Its purposes are as follows: "1. To form a community and/or little communities that weave a network of Love guided by the Holy Spirit, in the vivid and tangible examples of the Sacred Heart of Jesus; doing the expressed WILL of God the Father: A community that enjoys life because there is God. 2. To allow God to work: IN US (internal changes) FOR US (personal and communal growth) THROUGH US (outreach programs/services) And thereby becoming witnesses and expression of a God that is alive and among us. 3. To care, To help, To serve, the psycho-spiritually wounded and offer them refuge healing, and/or transitory shelters." TAIESD 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. Accordingly, as a non-stock, non-profit religious organization, Munting Kawan ng Sagrado Corazon Foundation, Inc., therefore, is exempt from tax on all revenues derived in pursuance of its purpose as a religious organization and used actually, directly and exclusively for religious 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, Munting Kawan ng Sagrado Corazon Foundation, Inc. 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. HOWEVER, this ruling is subject to the condition that the Foundation shall submit photocopy of its Annual Information Returns for the past three (3) years and 2009 Financial Statements (balance sheet) in compliance with RMC No. 14-2001. 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, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service