BIR Ruling

October 26, 1977 Rev. Father Gabriel Keohane Director & Chairman Board of Trustees San Jose Academy Dumingag, Zamboanga del Sur Reverend Father : This refers to your request for exemption of the San Jose Academy, under Section 27(e) of the Tax Code. In reply, I have the honor to inform you that pursuant to Presidential Decree No. 305, beginning the calendar year 1974, and fiscal year beginning July 1, 1974, as the case may be, private educational institutions, whether stock or non-stock are already subject to 10% tax on their taxable net income from the operation of the school, related school activities, and on their passive investment income consisting of interest, dividends, royalties and the like. However, prior to Presidential Decree No. 305, your School qualified for exemption from income tax under Section 27(e) of the Tax Code, as disclosed by the report of investigation conducted by this Office that your school is engaged exclusively in educational activity and that no part of its net income inure to the benefit of any individual. Therefore, pursuant to Section 24 of the Income Tax Regulations your school was, prior to the promulgation of Presidential Decree No. 305, exempt from the filing of an income tax return but required to file an information return. However, if the School derived income from any of its properties, real or personal or for any activity conducted for profit, it was required to file a return therefor and pay tax thereon, such income being subject to tax under Section 27(e) o the Tax Code. Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-D2567-D1025-A-2