Autism Hearts Phils., Inc.

November 24, 2009 BIR RULING [NSNP-(S30E-144) 735-09] 30 (E); S-30-030-2003 Autism Hearts Phils., Inc. Unit 10B Salcedo Towers 169 H.V. dela Costa St., Salcedo Village Makati City Attention: Ms. Cristine C. Roa Executive Director Gentlemen : This refers to your letter dated September 30, 2009 requesting in effect for exemption from the payment of income tax under Sec. 30 of the Tax Code of 1997, as amended. Documents submitted to this Office show that Autism Hearts Philippines, Inc. (AHPI) with Tax Identification No. (TIN) 007-344-749-000, is a non-stock, non-profit association whose purposes among whom are to help maximize the potential of individuals with autism to learn, develop, function independently and participate in full range of social, cultural and life experiences and to improve the quality of life of individuals with autism and their families by fostering state of the art research and developing programs, services and specialized training. In reply, please be informed that this Office cannot as yet issue the requested ruling/certificate of tax exemption. AHPI 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 Sec. 24 of Revenue Regulations No. 2, based on such information return, our Revenue District Office (RDO) which has jurisdiction over the place where the corporation'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. AEaSTC However, AHPI 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 the corporation derives 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, AHPI 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 AHPI 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