GreenEarth Heritage Foundation

December 7, 2009 BIR RULING [NSNP-(S30G-086) 754-09] S-30; BIR Ruling No. S30-080-2007 GreenEarth Heritage Foundation 6 Mola St., La Paz, Makati City Attention: Ms. Mylene V. Matti, M.D. Founder and Executive Director Gentlemen : This refers to your letter dated September 21, 2009 requesting for tax exemption as a non-stock, non-profit organization. As represented, GreenEarth Heritage Foundation is a non-stock, non-profit corporation with Taxpayer Identification No. 007-298-144-000; that GreenEarth Heritage Foundation was registered with the Securities and Exchange Commission (SEC) on May 22, 2009 under Company Registration No. CN200907344; and that the purposes for which the foundation was created, are as follows: "1. Experiment and conduct pilot projects in organic crop and livestock under free range and pastured systems, employing natural feeding techniques under globally accepted standards for sustainability; 2. To conduct research and development on the healthy uses of indigenous plants in order to determine and validate their nutritional content and medicinal benefits; 3. To conduct or arrange for technical training programs or offer scholarship in organic agriculture; 4. To develop the skills of farm workers or provide employment in organic rural farming ventures and/or assist in self-employment opportunities for small-scale organic crop production, organic animal husbandry, processing and packaging technologies; EHaCID 5. To implement reforestration of denuded or logged-over areas, as part of social responsibility and environmental restoration primarily utilizing indigenous trees and plants which will promote the return of natural flora and fauna endemic to the area; and 6. To adapt and develop optimum and productive use of indigenous materials for village level small scale industries use locally." In reply, please be informed that this Office cannot yet issue the requested ruling/certificate of tax exemption. GreenEarth Heritage Foundation 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. However, GreenEarth Heritage Foundation 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. TcICEA It should be understood that GreenEarth Heritage Foundation 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 represented. 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