BIR Ruling

September 21, 1971 Santa Clara Academy, Inc. Tigaon, Camarines Sur Attention: V.R. Mother Teresita Hacbang, O . P . Chairman, Board of Trustees Gentlemen : This refers to your letter dated April 1, 1971 requesting exemption of the Santa Clara Academy, Inc., Tigaon, Camarines Sur, from the payment of income tax and filing of the corresponding income tax return under Section 27(e) of the Tax Code. Investigation disclosed that the Santa Clara Academy, Inc. (hereinafter referred to as the corporation) is a non-stock and non-profit religious-educational corporation duly registered with the Securities and Exchange Commission; that the purpose for which the corporation was established is to give a sound, complete and general education to children and youth in the Philippines and to promote their intellectual and moral development; that the place where the principal office of the corporation is to be located is in the municipality of Tigaon, Camarines Sur; that the Corporation shall be administered by a Board of Trustees to be composed of five (5) members who must also be members of the Congregation of Dominican Sisters of St. Catherine of Sienna; that the trustees shall serve for a term of six (6) years from and after the date of their election and until their successors are elected or duly qualified; that the corporation shall be maintained by means of tuition fees, maintenance, entrance, matriculation fees and other fees that it may collect from students enrolling there; that the corporation derives no income from its properties or from any activity conducted for profit that if the corporation derives any income, from any source whatsoever, it is merely incidental to its activities as a non-stock, non-profit, religions-educational and other related activities; and that no part of its income, if any, inures or accrues to the benefit of any private individual or shareholder. In view of all the foregoing, this Office believes and so holds that the Santa Clara Academy, Inc. falls within the purview of a corporation or association organized and operated exclusively for religious and educational purposes as contemplated under Section 27(e) of the Tax Code. Accordingly, it is exempt from the payment of income tax. It 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, 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 in its By-Laws, Articles of Incorporation, manner of operation and activities as well as disposition of income. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue