Bernaldo Mirador & Directo Law Offices

October 16, 2009 BIR RULING [NSNP-(S30E-133) 651-09] S-30-030-2003 Bernaldo Mirador & Directo Law Offices Unit 1807 Cityland Condominium 10 Tower 1 6815 Ayala Avenue cor. H.V. Dela Costa St. Makati City Attention: Pepito G. Po Partner Gentlemen : This refers to your letter dated August 5, 2008 requesting on behalf of your client, I CANSERVE Foundation, Inc. for exemption from the payment of income tax and the filing of the corresponding income tax return under Section 30 of the Tax Code of 1997 as amended, value-added tax (VAT), donors tax and deductibility on donations. Documents submitted to this Office show that I CANSERVE Foundation, Inc. is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CN200802986 dated February 29, 2008; and that the purpose or purposes for which the corporation was formed is to foster closer cooperation within the breast cancer community-support groups, patients, survivors, doctors, care givers so that they can share resources and create opportunities for the battlement of those living through cancer; to prevent more cases of breast cancer by informing the public; to encourage the participation of the public in giving those living through breast cancer a fighting chance at a better life; to foster ties between support groups here and Filipino breast cancer support groups abroad to give Filipinos in the Philippines and those living abroad more support group options and to share information and resources that will advance the interest of the patient living through cancer. In reply, please be informed that this Office cannot yet issue the requested ruling/certificate of tax exemption. I CANSERVE Foundation, Inc. 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 must 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, our Revenue District Office which has jurisdiction over the place where the Foundation's principal office is located 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. TSacCH However, I CANSERVE Foundation, 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 this Foundation 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, the Foundation 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 the Foundation's gross income and expenses incurred during the preceding period and a certificate showing that there has not been any change in your By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. It should be understood that I CANSERVE Foundation, 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. In addition, its 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 has complied with the conditions under which it may be granted tax exemption or tax incentives; and that it has paid 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