Mt. Atio-An Prayer Tower Ministries, Inc.

August 4, 2009 BIR RULING [NSNP-(S30E-100) 495-09] NSNP; RMC 14-2001 Mt. Atio-An Prayer Tower Ministries, Inc. Gen. Aguinaldo, Ramon, Isabela Attention: Rev. Tony Atio-an Founder Gentlemen : This refers to your letter dated requesting for a certificate of tax exemption in favor of the Mt. Atio-an Prayer Tower Ministries, Inc., a religious corporation duly registered with the Securities and Exchange Commission (SEC). Documents submitted show that the Mt. Atio-an Prayer Tower Ministries, Inc., with Taxpayer Identification No. 006-291-199, is an independent religious institution, duly registered with the SEC under Registration No. A200111327 dated August 2, 2001; that the source of its funds are mainly donations, tithes and offerings from its members; that the purpose for which it was created is to preach the Christian gospel; that it conducts its religious meetings and worship services in Ramon, Isabela; and that no part of its income inures to the benefit of its members or any other individuals. In reply thereto, please be informed that paragraph 3, Section 28, Article VI of the 1987 Constitution provides, viz. : "(3) Charitable institutions, churches and parsonages or convents appurtenant thereto, non-profit cemeteries, and all lands, buildings, and improvements actually, directly, and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation." The exemption above conferred by the Constitution refers to internal revenue taxes and customs duties, in appropriate cases, imposed by the national government on all revenues and assets of non-stock, non-profit charitable, religious and educational institutions used actually, directly and exclusively for charitable, religious and educational purposes. CIDaTc Moreover, 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 religious organization, the Mt. Atio-an Prayer Tower Ministries, 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 activity 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 benefit from deposit substitute instruments and from trust funds and similar arrangements received by the organization, and royalties, derived from sources within the Philippines, if any, shall be 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. It should be understood that the Mt. Atio-an Prayer Tower Ministries, Inc. shall be constituted as withholding agent of the government if it acts as an employer and any of its employee receives compensation income subject to withholding tax, or if it makes income payments to individuals or corporations subject to the expanded withholding tax provided for in Section 57 (B) of the Tax Code of 1997. (BIR Ruling No. S-30-023-99 dated March 15, 1999) Moreover, as a tax-exempt organization, the Mt. Atio-an Prayer Tower Ministries, Inc. should file an annual information return on or before the 15th day of the 4th month following the end of your taxable year. Under Section 235 of the Tax Code, 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 periodic 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 as null and void. DHIETc Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service