BIR Ruling [UN-454-95]

December 27, 1995 BIR RULING [UN-454-95] Quasha Asperilla Ancheta Pea & Nolasco Don Pablo Building 114 Amorsolo St. Makati City Attention: Atty . Dennis G . Dimagiba Gentlemen : This refers to your letter dated November 2, 1995 requesting exemption, in behalf of your client, International Missions, Inc. (IMI), from the payment of income tax and the filing of the corresponding income tax return. It is represented that the IMI is a non-stock, non-profit religious, charitable and educational institution licensed to do business in the Philippines and domiciled in the State of Pennsylvania, U.S.A. (formerly it was domiciled in New Jersey, U.S.A.); that in the Philippines, IMI has foreign missionaries carrying out its religious work; that the number of the foreign missionaries serving in the country may vary from time to time; that the missionaries derive their financial support from donations in the United States; that these donations and/or pledges are received by the organizations' office in the United States and then deposited to the missionaries' individual bank accounts in the United States, after deducting a certain amount which will be used for the administrative expenses of the organization; that the donations and/or pledges are made to the missionaries prior to their coming to the Philippines; that the missionaries in the Philippines then draw against their individual U.S. bank accounts through issuance of checks or by otherwise transferring the amount they need for their support to their individual Philippine bank accounts; and that the missionaries do not receive any form of compensation nor financial support from IMI. In reply thereto, please be informed that since the financial support being received by the foreign missionaries are not compensation and/or salary but donations which were given to them prior to their coming to the country; and that the funds are merely coursed through the IMI for the account of the foreign missionaries, said financial supports are not, therefore, subject to Philippine income tax. Accordingly, these foreign missionaries need not file income tax returns in the Philippines. (BIR Ruling No. 082-94 dated April 4, 1994) 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. cdtech Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)