BIR Ruling

May 26, 1976 Philippine Trampship Agents Association, Inc. 2nd Floor, Union Cement Bldg. Bonifacio Drive, Port Area Manila Attention: Mr . Felizardo A . Habito Administrator, PTAA Secretariat Gentlemen : This refers to your request for exemption from the payment of income tax and the filing of the corresponding income tax return under Section 27 of the Tax Code. cdta Investigation conducted by this Office disclosed that the Philippine Trampship Agents Association, Inc., is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission; that the purposes for which the Association is organized are: 1) To promote and cultivate harmonious relations among its members by inspiring mutual trust and understanding among them and resolving conflicts or differences amicably and by mutually satisfactory and reasonable means; 2) To promote and advance the best interests of the members of the association in a manner that will serve the best interests of the Tramp shipping industry as a whole, by proposing or suggesting to the proper authorities the passage of laws, rules and regulations that will effectuate the same; 3) To provide, by mutual consultations and cooperation, maximum efficiency of service to all vessels calling at Philippine ports in order to promote and advance the Philippine tramp shipping agency industry; 4) To make available the services of the association and statistics and data on chartering, freight, movements and allied information for dissemination to all members and to adopt and maintain a high quality standard of service and encourage the observance of ethical fair trade practices among tramp shipping agents and inject more professionalism amongst them; 5) To do such other things as may be necessary to enhance the tramp shipping industry and promote the interests of principals and members and to contribute to the economic development of the country; and 6) To accomplish all the foregoing, the Association shall have the power to lease lands, buildings, equipments, and personal properties; to acquire real and personal properties and administer, possess, hold, sell, convey, mortgage and otherwise dispose of the same; that the Corporation shall be maintained and financed by membership, monthly fees and additional and equal contributions from members when required and that no part of its net income shall inure or accrue to the benefit of any individual member or contributor. Based on the foregoing facts, this Office believes and so holds that the Philippine Trampship Agents Association, Inc., 2nd Floor, Union Cement Bldg., Bonifacio Drive, Port Area, Manila, is a business league as contemplated under Section 27(f) of the Tax Code because it is an association of persons having some common business interest, which limits its activities to work for such common interest and does not engage in regular business of a kind ordinarily carried on for profit. (Sec. 31, Rev. Regulations No. 2). Accordingly, that Corporation is exempt from the payment of income tax as well as the filing of income tax returns. However, it is required to file on or before April 15, of each year, a profit and loss statement and balance sheet with the 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 change of its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3