Kilos Ko Foundation, Inc.

August 26, 2009 BIR RULING [NSNP-(S30G-061) 525-09] 27 (D) (1); S-30-012-07 Kilos Ko Foundation, Inc. 446 ACS Bldg., EDSA Guadalupe Viejo Makati City 1211 Attention: Ms. Nila N. Mendiola Managing Partner Gentlemen : This refers to your letter dated July 21, 2009, 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. Documents submitted to this Office disclosed that Kilos Ko Foundation, Inc., with Taxpayers Identification No. 007-254-225-000 is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission under SEC Registration No. CN 200903021 dated February 27, 2009; and that the purposes for which Kilos Ko Foundation, Inc. was incorporated are as follows: "Primary Purpose To promote, support and encourage civic participation toward good governance by organizing events and activities and formulating programs that advance active engagement in socio-civic and political affairs and "citizen leadership" among Filipino individuals and communities; by producing and disseminating public information and advocacy materials that encourage Filipinos to challenges enveloping the nation through critical thinking, political discernment, and socio-civil participation; by funding research and studies that aim to identify, understand, and maximize Filipino attitudes and behaviors toward citizen participation, social responsibility, and good governance; and by supporting programs, activities, and events that contribute to an active citizenry taking responsibility for positive social change." TIEHSA SECONDARY PURPOSES 1. To receive and accept contributions, donations, gifts, endowments, bequests or devices of money, or any real or personal property necessary, desirable and proper for the Foundation to receive, accept, hold and administer; 2. To receive and hold title to any and all real and personal property of every kind and description or any interest therein, donated, devised or bequeathed to or acquired by the Foundation in trust, and to purchase, own, operate, develop, lease, mortgage, pledge, exchange, sell, transfer, or otherwise deal in such properties in any manner permitted by law, for the purposes abovementioned; 3. To acquire, hold, buy, sell, exchange, rent or lease, mortgage or otherwise encumber any real or personal property, and to execute and deliver any necessary deed or bill of sale or other transfer of property; or to lend or otherwise invest and reinvest its funds, money, or properties in such undertakings and pursuits as may be desired, necessary or proper, to achieve or carry out the objects and purposes of the Foundation; 4. To collect, invest and reinvest all moneys and income coming to it and hold the same for the benefit of the Foundation, subject to such limitations as may be prescribed by law; and to make use of such funds in carrying out the objectives of the Foundations; 5. To give financial support, grants, sponsorships, donations and other forms of financial aid out of the funds of the Foundation for the purpose of enhancing and advancing the purposes for which the Foundation is organized; and 6. To organize, conduct and carry on any and all activities whatsoever which are necessary, proper, or convenient to carry out the objectives and purposes of the Foundation and generally, to do all such things and exercise any and all rights, powers and attributes of corporations in general as may be directly or indirectly incidental or conductive to the attainment of the above mentioned purposes. In reply, please be informed that this Office cannot yet issue the requested ruling/certificate of tax exemption. Kilos Ko Foundation, Inc. have 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 the 15th day of the fourth month following the start of its 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, this Office, through the Regional Office, Makati, which has jurisdiction over the foundation's business address shall conduct the necessary investigation on the foundation's activities undertaken during the period. The determination letter of exemption shall thereafter be issued depending upon the result of our investigation. TSHIDa However, Kilos Ko 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 it 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, Kilos Ko Foundation, Inc., is required to file on or before the 15th day of the fourth month following the end of its accounting period 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 its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. It should be understood that Kilos Ko 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. Finally, the Foundation'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 has been complying with the conditions under which it may be granted tax exemption or tax incentives and/or has 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