REBAP Makati, Inc.

March 13, 2009 BIR RULING [NSNP-(S30G-024) 211-09] 27 (D) (1); S-30-012-07 REBAP Makati, Inc. Legaspi Towers 200 Paseo de Roxas Legaspi Village, Makati City Attention: Mr. Samuel M. Garcia President Gentlemen : This refers to your letter dated November 12, 2008, requesting for exemption from the payment of income tax and filing of the corresponding income tax return under Section 30 of the Tax Code of 1997, as amended. EDCcaS Documents submitted to this Office disclosed that REBAP Makati, Inc., with Taxpayer's Identification No. 007-051-861, is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission under SEC Registration No. CN200808742 dated June 5, 2008; and that the purposes for which REBAP Makati, Inc. was incorporated are the following: 1. To promote the interest of all those engaged in land development and housing including real estate management, financing, marketing, appraising and allied occupations; 2. To set up, upgrade and maintain the standards of practices in the real estate business and realty service practices; 3. To adopt and enforce a Code of Ethics approved and accepted by the Director of the Department of Trade and Industry upon the recommendation of the Bureau of Trade Regulation and Consumer Protection; 4. To establish a uniform schedule of minimum fees, commission or compensation to ensure the delivery of not less than the expected realty service performance by the members; 5. To cooperate with government agencies and entities as well as other trade organizations as regards adoption of laws, ordinances, regulations and functions involving or affecting real estate; and 6. To promote the mutual interest of the members and the community; In reply, please be informed that this Office cannot yet issue the requested ruling/certificate of tax exemption. You have to prove by actual operation for at least three (3) years that you are really an organization/association exempt from income tax under Section 30 of the Tax Code of 1997, as amended. You can file the necessary annual information return instead of an income tax return on or before the 15th day of the fourth month following the start of your operation as an exempt organization as required under Section 24 of Revenue Regulations No. 2 ( Collector vs. Sinco, G.R. L-9276 dated 23 October 1956). Based on such information return, we shall conduct the necessary investigation on your activities undertaken during the period. The determination letter of exemption shall thereafter be issued depending upon the result of our investigation. SDATEc However, REBAP Makati, 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 you 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, you are required to file on or before the 15th day of the fourth month following the end of your accounting period Profit and Loss Statement and Balance Sheet with Annual Information Return under oath, stating your 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 REBAP Makati, 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, your 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 you have been complying with the conditions under which you may be granted tax exemption or tax incentives and 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