Soroptimist International of Silangan

June 30, 2009 BIR RULING [NSNP-(S30G-046) 416-09] NSNP; RMC 14-2001 Soroptimist International of Silangan No. 38 Asuncion St., Morning Breeze Subdivision Caloocan City Attention: Ms. Evangeline "Eva" T. Nono President Mesdames : This refers to your letter dated May 13, 2009 requesting for a certificate of tax exemption in favor of the Soroptimist International of Silangan ("SIS"), a member club of Soroptimist International of the Philippines Foundation, Inc., a nonstock, nonprofit civic organization, an affiliate of the Soroptimist International of the Americas (SIA), with Taxpayer Identification No. 264-768-704-000, duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. AN093-02263, on May 18, 1993. HTcADC As a member club of the Soroptimist International of the Philippines Foundation, Inc., SIS acts as its support organization in the promotion of social welfare, especially those related to the advancement of women and the development of youth. The funds of SIS are coming from donations and support given by its mother foundation. The trustees of the organization are not receiving any fees or compensation. In reply thereto, please be informed that Section 30 (G) of the Tax Code of 1997, as amended, exempts from income taxation civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare. Accordingly, and since SIS is a non-stock, non-profit civic organization, it is therefore exempt from tax on all revenues derived in pursuance of its purpose as a civic organization. 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. Moreover, as a tax-exempt organization, SIS is required to file on or before the 15th day of the fourth month of the preceding 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 year 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. Further, 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, i.e. , SIS, 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. CacTIE It should be understood that SIS 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) 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service