BIR Ruling

May 28, 1968 Rev. Father Leandro Montaa, C.M. c/o Adamson Ozanam Educational Institutions, Incorporated Manila Reverend : This refers to your request for the exemption from income tax of the Adamson Ozanam Educational Institutions, Inc. under the provisions of Section 27(e) of the NIRC. According to investigation, the Adamson University was up to December 8, 1964 operated by the Adamson University, Inc. when it retired from the operation of the School. Thereafter it was operated by the Adamson Ozanam Educational Institutions, Inc., hereinafter referred to as Adamson Ozanam, a corporation organized by the Congregacion de la Mision de San Vicente de Paul en Filipinas, hereinafter referred to as the Congregacion. Adamson Ozanam was incorporated by the members of the Congregacion and the two Adamson brothers as a non-stock non-profit association. Thru the kindness of the Adamsons, Adamson Ozanam was authorized to continue the use of the name Adamson University. The Adamson brothers has no material interest in the University whatsoever. The land and building housing the University as well as all the equipments, furnitures, books and other facilities therein are all owned by the Congregacion. Of the ten members of the Board of Trustees, 8 are members of the Congregacion headed by no less than yourself as President and Chairman. Only the Adamson brothers are trustees who are not members of the Congregacion. It appears further that you are the Mayor Provincial of the Congregacion which position is the highest therein. All the members of the Board of Trustees, including the Adamson Brothers receive no compensation whatsoever. The operation of the University is maintained principally from tuition fees. All income of the University are used to pay salaries, to purchase library books, laboratory equipment and other school facilities, and for the construction and repair of buildings of the University. No income of the University inures to the benefit of any private individual. All income are immediately plaughed back to the institution for improvement and expansion of the University. In reply, I have the honor to inform you that, in the light of the foregoing facts, it is the opinion of this Office as it hereby holds that Adamson Ozanam is, for its operation of the University, exempt from income tax pursuant to Section 27(e) of the Tax Code. Such being the case, it need not also file an income tax return on income derived from the operation of the University. It is, however, required to file on or before April 15 of each year an annual information return under oath, stating its gross income and expenses incurred during the preceding year and a certificate showing that there has not been any substantial change in its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. It is furthermore understood that the corporation is subject to income tax on income of whatever kind and character from any of its properties, real or personal, regardless of the disposition of such income pursuant to the aforesaid section of the Tax Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue