BIR Ruling

July 3, 1973 Mr. Isaac S. Puno, Jr. Puno Law Office Room 213 Forum Building Rizal Ave. Cor. Lope de Vega St. Manila S i r : This refers to your letter dated June 13, 1973 requesting that your clients, the different hospitals mentioned therein be exempted from the 3% contractor's tax imposed by Section 191 of the Tax Code, as amended by Presidential Decree No. 69 for the reasons that they are non-stock and non-profit corporations which are church-related institutions; that no part of their income inures to the benefit of any of their trustees or individual members; that these hospitals are run by trustees who receive no compensation but discharge their office voluntarily and in the spirit of the service; that the income are utilized wholly in supporting their charity wards and non-profit activities; and that none of them are engaged in business for profit. In reply, I have the honor to inform you that your request is hereby granted. In this connection, please be further informed that the previous rulings of this Office holding that hospitals fall within the purview of the term "independent contractors" under Section 191 of the Tax Code, as amended by Presidential Decree No. 69 and, therefore, subject to the contractor's fixed and percentage taxes under Sections 182(A)(1) and 191 of the Tax Code, have been revoked and superseded by the ruling of this Office dated June 20, 1973. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR"