BIR Ruling

March 17, 1976 Padilla Law Office 6th Floor, Shurdut Bldg. Muralla, Manila Gentlemen : This refers to your letter dated February 26, 1976 requesting a ruling as to whether the activities of your client, the Religious of the Virgin Mary, are subject to tax. It is represented that your client is a religious corporation and is incorporated as a non-stock, non-profit religious, charitable and educational corporation; that they have a home for aged sisters of the congregation and as part of their therapy, these aged sisters engage in designing and producing greeting cards and other stationery which are sent to a printer for reproduction in bulk and then sold by the congregation to bookstores and stationery suppliers, the profit of which is used for the care of the aged sisters and for the improvement of the library of the congregation. Based on the foregoing representations, this Office believes and so holds that your client falls within the purview of the term "publisher" as contemplated in Section 191(15) of the Tax Code and, therefore, subject to the P50.00 annual fixed tax prescribed in Section 182(A)(1) and to the 3% tax on gross receipts pursuant to Section 191 of the same Code. Moreover, while the activity of your client, for being a religious corporation, does not affect its status as a tax exempt organization under Section 27(e) of the Tax Code, the receipts derived from said activity are subject to income tax. Under said provision a religious organization is subject to corporate income tax on its income ". . . from any activity conducted for profit regardless of the disposition made of such income . . .". Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-1182-568-4