BIR Ruling

June 8, 1970 Atty. Luis B. Buendia c/o Mindanao Sanitarium and Hospital Iligan City S i r : This refers to your letter dated January 26, 1970 requesting information as to the effect of Republic Act. No. 6110, otherwise known as the Omnibus Tax Law, on the income and occupation tax exemptions granted by this Office on April 20, 1966 to Mindanao Sanitarium and Hospital and the professionals employed therein respectively. acd In reply, I have the honor to inform you that the provisions of Section 27(e) of the Tax Code, relative to corporations or organizations exempt from income tax, have not been amended or repealed by said Republic Act No. 6110. Hence, corporations or associations organized and operated exclusively for religious and charitable purposes, no part of the net income of which inures to the benefit of any private stockholder or individual shall not be taxed in respect to income received by them as such. However, not all of their incomes are exempt from tax. Income of whatever kind and character from any of its properties, real or personal, or from any activity conducted for profit, regardless of the disposition made of such income, shall liable to income tax. Mindanao Sanitarium and Hospital was granted exemption of the findings that the same was a religious and charitable organization not conducted for private gain. Accordingly, if the facts existing on the date of the grant of said exemption have remained unaltered up to the present, then it is still exempt from income tax, under Section 27(e) of the Tax Code. As regards the occupation tax of various professionals employed in the Mindanao Sanitarium and Hospital, you are informed that the former provision of Section 182(c)(7) of the Tax Code which exempted from occupation tax persons employed in any religious, or charitable institution, or hospital, sanitarium, such as the Mindanao Sanitarium and Hospital or in any similar establishment not conducted for private gain, whose entire professional services are devoted exclusively thereto or are applied under its direction, has been deleted by Republic Act No. 6110. Such deletion is sufficiently explicit and indicative of legislative intent to tax professionals in the employ of said institutions. casia Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue