BIR Ruling

April 26, 1976 Kaisahan Settlement Foundation, Inc. Bishop's House, Bacolod City Attention: Rev . Fr . Leon I . Orbista Project Director 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(e) of the Tax Code. Investigation disclosed that the Kaisahan Settlement Foundation, Inc.,is a non-stock, non-profit organization duly registered with the Securities and Exchange Commission; that the purposes for which the Foundation was organized are: a) To help deserving and bona fide farmers without lands to acquire and own economic family-size farm units; b) To find ways and means, develop plans, and initiate actions for the systematic opening of alienable and disposable lands of the public domain for speedy distribution and development by deserving and qualified persons who need, deserve and are capable of cultivating lands personally; and to undertake measures which will insure the early issuance of titles over actually settled and cultivated disposable and alienable lands of the public domain; (c) To help deserving farmers increase their productivity and income by assisting them in financing and providing them with technical men; that the Foundation is maintained by contributions from its members and such other gifts, donations, trusts, legacies or from voluntary contributions from the public and from any income from any of its activities which are incidental and in relation to the purposes of the Foundation; and that no part of its net income inures or may accrue to the benefit of any member or individual and that upon dissolution of the Foundation, the balance, if any, of all its money, property, rights or other assets after the payment in full of all its debts and obligations shall be used and distributed exclusively for charitable, scientific and educational purposes. Based on the foregoing facts, this Office believes and so holds that the Kaisahan Settlement Foundation, Inc. Bacolod City, falls within the purview of a civic league or organization not organized for profit but operated exclusively for the promotion of social welfare, as contemplated under Section 27(g) of the Tax Code. The term "civic league" has been construed "to include organizations operated exclusively for purposes beneficial to the community as well as those aimed at promoting the welfare of mankind". (Mertens, vol. 6, par. 34.18, chap. 54, p. 79). Accordingly, it 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 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."