BIR Ruling

August 30, 1976 Philippine Normal College (PNS) Alumni Association, Incorporated PNCAA Blg. Corner Ayala San Marcelino Manila Attention: Supt . Modesta G . Boquiren President Gentlemen : This refers to your letter of the 2nd instant requesting in effect exemption from the payment of income tax and the filing of the corresponding income tax return under Section 27 of the Tax Code. Documentary evidence submitted show that Association is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission. The purposes for which that Association is formed are: a) to foster understanding and promote fellowship among alumni of the Philippine Normal School, the Philippine Normal College and members of this Association: b) to encourage alumni of the Philippine Normal School (PNS) and the Philippine Normal College (PNC) in helping maintain and advance the prestigious standing of the college in the field of teacher education; c) to keep abreast with the advance of education and utilize it as means of promoting SOCIO-ECONOMIC PROGRESS, Philippine Culture and nationalism; d) to install a sense of confidence and pride in being a product of the Philippine Normal School and Philippine Normal College; e) to extend protection and help to deserving alumni; f) to advance the interest and promote the prestige and welfare of the Philippine Normal College and its alumni; that the association derives its income principally from membership dues, income from the operation of a dormitory whose boarders are mainly students, alumni and staff members of the Philippine Normal College, who pay very minimal fees and from its rental income for the lease of the western portion of its building to the Educational Developing Projects Implementing Task Force of the Department of Education and Culture which is spent for building maintenance and salaries of the staff; and that no part of its net income inures or accrues to the benefit of any member or individual. Based on the foregoing facts, this Office believes and so holds that, that Association is a social club falling within the purview of a club organized and operate exclusively for pleasure, recreation and other non-profitable purposes, as contemplated under Section 27(h) of the Tax Code. (See Section 33, Revenue Regulations No. 2; 34 Am. Jur. 2d, p. 659). Accordingly, it is exempt from the payment of income tax as well as the filing of the income tax return. 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 in its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. aisa dc Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3