Pasar Foundation, Inc.

July 31, 2009 BIR RULING [NSNP-(S30E-091) 476-09] Section 30 (E);NSNP(S30h-058)289-2008 Pasar Foundation, Inc. Leyte Industrial Development Estate Isabel, Leyte Attention: Ms. Shermila J. Yasay Treasurer and Trustee Gentlemen : This refers to your letter dated January 8, 2007 which was received by this Office by way of 1st Indorsement dated September 10, 2007 by Revenue District No. 89, Ormoc City requesting for tax exemption as a non-stock, non-profit charitable institution pursuant to Section 30 of the Tax Code of 1997. Documentary evidence submitted disclosed that PASAR FOUNDATION, INC. with TIN 005-760-883 is a non-stock, non-profit corporation registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CN200425166 dated February 4, 2004; and that the purposes for which the corporation is organized, among others are as follows, viz. : a. To help build prosperous community enterprises and local cooperatives that will contribute to the upliftment of the residents of local community in Isabel, Leyte and neighboring municipalities; and the development of local revenues. b. To promote environmental conservation through proper waste management, watershed conservation and sustainable coastal resource management. c. To operate a Foundation Resource Center that will help provide local enterprises access to appropriate technology, credit and financing; training of NGO's and government agencies in community-based enterprise techniques and management approaches. TCASIH Based on the foregoing, this Office is of the opinion and so holds that the Norwegian Maritime Foundation of the Philippines, Inc. falls within the purview of a non-stock, non-profit foundation/charitable institution 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 its 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 it has been complying with the conditions under which it has been granted tax exemption or tax incentives and its tax liabilities, if any, pursuant to Section 235 of the Tax Code of 1997. However, this ruling is subject to the condition that the foundation shall submit copies of its financial statements and Annual Information Return for the last three (3) years in compliance with Revenue Memorandum Circular No. 14-2001, otherwise, it shall be given a temporary exemption instead. HAaDTE 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