BIR Ruling

August 27, 1971 Msgr. William Brasseur, D.D. Chairman, Board of Trustees Parochial (Mission) Schools Vicariate of the Mt. Province Bishops Residence, Baguio City Reverend Father : This refers to your request for exemption of the Santo Rosario High School, Inc. of Pudtol Kalinga-Apayao from the payment of income tax and filing of the corresponding income tax return under Section 27(e) of the Tax Code. acd It appears that the Santo Rosario High School, Inc. (hereinafter referred to as the School) is a Parochial (Mission) institution organized and operated for religious, moral, academic, cultural, and industrial instruction and education of boys and girls; that it is supported and maintained with funds and resources from entrance, matriculation, tuition fees and other school fees, subsidies and aids from the catholic Vicar Apostolic of the Mt. Province, donations and assistances from benevolent donors and agencies; that it major disbursements were channeled to salaries and additional school buildings; and that no part of its net income inures to the benefit of any individual. Based on the foregoing facts, this Office is of the opinion and so holds that the School is exempt from the payment of income tax under Section 27(e) of the Tax Code. The school is, however, subject to income tax on income derived from any of its properties, real or personal, or from any activity conducted for profit, regardless of the disposition made of such income. If it has not earned any taxable income, it is also exempt from the filing of income tax returns. Moreover, the School 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 substantial change in its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income pursuant to Revenue Regulations No. 7-64 dated November 4, 1964. aisa dc Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue