BIR Ruling

August 29, 1972 Sycip, Salazar, Luna, Manalo Law Office Third Floor, Far East Building Buendia Avenue, Makati, Rizal Gentlemen : This refers to your letter requesting exemption of your client, the Coffee and Cacao Institute of the Philippines, Inc., 867 Estrada Street, Manila from the payment of income tax and filing of the corresponding income tax return under Section 27(a) of the Tax Code. Investigation disclosed that the Coffee and Cacao Institute of the Philippines, Inc. (Hereinafter referred to as the association) is a non-stock and non-profit corporation duly registered with the Securities and Exchange Commission; that the purpose for which the association was organized are: to collaborate and cooperate with all the branches and agencies of the Philippine Government, chambers of commerce, farmers' association, cooperatives, groups and other organizations, as well as interested individuals, in the culture, propagation, furtherance and betterment of the coffee and cacao plants; to establish and follow sound and constructive policies which will encourage, protect and promote said cacao and coffee growing, qualitatively; to foster a spirit of cooperation and mutual helpfulness among those engaged in coffee and cacao growing; and to promote the use and consumption of coffee and cacao products; to establish, maintain and operate a suitable institute consisting of agricultural consultation offices and/or other regional offices and stations which shall furnish information and technical assistance of coffee and cacao growers; to engage in research and maintain laboratories to scientifically foster the best methods of planting, care and harvesting of coffee and cacao; and in furtherance of the purposes aforesaid, the association shall have the following incidental powers: to acquire or obtain from any governmental authority, national or municipal, local or otherwise, or any corporation, company or person, such charters, franchises, licenses, rights and privileges and concessions, which may be conducive to the attainment of any of the objects of the association; to acquire by purchase, grant, exchange, devise, lease and to hold, operate, use or otherwise dispose of lands, buildings and equipment and other real and personal property as may be necessary to carry out the objects of the association; and to do and perform all acts and things necessary, suitable or proper for the accomplishment of any of the purposes herein enumerated, or which shall at any time appear conducive to the aims of the association, including the exercise of the powers, authorities and attributes conferred upon associations organized under the laws of the Philippines; that the term for which the said association is to exist is fifty (50) years from and after the date of its incorporation; that the association shall be maintained and supported by means of dues, fees and contributions from the members or interested parties; and that no part of the income, if any, of the association inures or may inure to the benefit of any private individual or shareholder. In view of all the foregoing, this Office believes and so holds that the Coffee and Cacao Institute of the Philippines, Inc. fall within the purview of an agricultural organization as contemplated under Section 27(a) of the Tax Code. Accordingly, it is exempt from the payment of income tax. 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 sources and disposition of income. acd Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue