Simbag sa Emerhensya Asin DagDag Paseguro Mutual Benefit Association (SEDP MBA), Inc.

September 28, 2009 BIR RULING [NSNP-(S30E-126) 627-09] Sec. 30; S-30-102-2008 dtd. 06/11/2008 Simbag sa Emerhensya Asin DagDag Paseguro Mutual Benefit Association (SEDP MBA), Inc. 2nd Floor Social Action Center Bldg., Cathedral Comp. Albay District, Legazpi City Attention: Rev. Fr. Ramoncito S. Segubiense President Gentlemen : This refers to your letter dated March 02, 2009 requesting for exemption from the payment of income tax, filing of the corresponding income tax return under Section 30 of the Tax Code of 1997, as amended. Documents submitted to this Office disclosed that Simbag sa Emerhensya Asin Dagdag Paseguro Mutual Benefit Association (SEDP MBA), Inc. is a non-stock, non-profit corporation under Section 30 of the Tax Code of 1997, as amended; that it is duly registered with the Securities and Exchange Commission under SEC Registration No. CN200902141 dated February 17, 2009 with Taxpayer Identification Number (TIN) 007-245-537; and that main objective for which the corporation was formed is to advance the interests and promote the welfare of the poor in particular and the interest and welfare of the Philippines in general. In reply, please be informed that this Office cannot yet issue the requested ruling/certificate of tax exemption. It has to prove by actual operation for at least three (3) years that it is really an organization/association exempt from income tax under Section 30 of the Tax Code of 1997, as amended. It can file the necessary annual information return instead of an income tax return on or before April 15 of each year following the start of its operation as an exempt organization as required under Section 24 of Revenue Regulations No. 2. Based on such information return, we shall conduct the necessary investigation on its activities undertaken during the period. The letter of exemption shall thereafter be issued depending upon the result of our investigation. EHCDSI However, Simbag sa Emerhensya Asin Dagdag Paseguro Mutual Benefit Association (SEDP MBA), Inc. shall be subject to the corresponding internal revenue taxes imposed under the Tax Code of 1997, as amended, on income derived from any of its properties, real or personal, or 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 instruments and from trust funds and similar arrangements, and royalties derived from sources within the Philippines are subject to 20% final withholding tax; provided, however, that the interest income it derive from a depository bank under the expanded foreign currency deposit system shall be subject to a final withholding tax of 7 1/2% pursuant to Section 27 (D) (1) in relation to Section 57 (A) of the Tax Code of 1997, as amended. Moreover, it is required to file on or before the 15th day of the fourth month following the end of its accounting period a Profit and Loss Statement and Balance Sheet with Annual Information Return under oath, stating its gross income and expenses incurred during the preceding period 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 sources and disposition of income. It should be understood that Simbag sa Emerhensya Asin Dagdag Paseguro Mutual Benefit Association (SEDP MBA), Inc. shall be constituted as a withholding agent for the government if it acts as an employer and any of its employees receives compensation income subject to withholding tax, or if it makes payments to individuals or corporations subject to the withholding tax provided for in Section 57 of the Tax Code of 1997, as amended. Finally, Simbag sa Emerhensya Asin Dagdag Paseguro Mutual Benefit Association (SEDP MBA), Inc.'s books of accounts and other pertinent records shall be subject to periodic examination by revenue enforcement officers of this Bureau for the purpose of ascertaining whether it complies the conditions under which it may be granted tax exemption or tax incentives and/or have paid its tax liability, if any, pursuant to Section 235 of the Tax Code of 1997, as amended. This ruling is being issued on the basis of the foregoing facts as presented. 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