Simplicio Gamboa Sr. Foundation, Inc.

July 30, 2009 BIR RULING [NSNP-(S30E-089) 469-09] Section 30 (E);S-30-023-2004 Simplicio Gamboa Sr. Foundation, Inc. SGS Foundation Bldg.,1335 G. Araneta Avenue Sto. Domingo, Quezon City Attention: Mr. Leo G. Angala Auditor Gentlemen : This refers to your letter dated October 28, 2008, which was received by this Office by way of 1st Indorsement dated February 17, 2009 by Revenue Region No. 7, Revenue District Office No. 38N, North Quezon City, requesting for a tax exemption pursuant to Section 30 of the Tax Code of 1997. Documentary evidence submitted disclosed that the Simplicio Gamboa Sr. Foundation, Inc. with TIN 000-343-342-000 is a non-stock, non-profit corporation registered with the Securities and Exchange Commission under SEC Registration No. AN091-190325 dated January 23, 1998; and that the purposes for which the corporation is organized, among others are as follows, viz. : 1. To provide and grant scholarship and other forms of financial assistance to those who are qualified to undertake studies and/or educational endeavors in all fields; 2. To promote and encourage the social and economic advancement of the less fortunate members of society by extending financial and/or material assistance in the acquisition of their productive skills and trades, by assisting them in profitable employment of such skills and trades, by providing them with managerial guidance in the establishment of income generating activities; 3. To sponsor and fund trainings, seminars, workshops and such other activities geared towards manpower development; HSCcTD 4. To undertake, spearhead and fund charitable and civic related works and projects that would redound to the welfare and benefit of our less fortunate countrymen such as the sick, the mentally retarded, the handicapped, the destitute and calamity victims. Based on the foregoing, this Office is of the opinion and so holds that the Simplicio Gamboa Sr. Foundation, Inc. falls within the purview of a non-stock, non-profit foundation 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. Likewise, interest income from currency bank deposits and yield or any other monetary benefit 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 from 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, it is required to file on or before April 15 of each year a profit and loss statement and balance sheet with the annual information return under oath, stating its gross income and expenses incurred during the year and a certificate showing that there has not been any change in its By-Laws, Articles of Incorporation, manner of operation and activities as well as resources and disposition of income. It should be understood that the said exempt non-stock, non-profit organization shall be constituted as withholding agent for the government if it acts as an employer and its employees receive 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, or if it makes income payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the Tax Code of 1997, also as implemented by Revenue Regulations No. 2-98. It is of course understood that your books of accounts and other pertinent records shall be subject to periodic examination by revenue enforcement officers of this Bureau for the purposes of ascertaining whether you have been complying with the conditions under which you have been granted tax exemption or tax incentives and your tax liabilities, if any, pursuant to Section 235 of the Tax Code of 1997. 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. EDHCSI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service