BIR Ruling

June 21, 1968 Mr. Liberato P. Taganas Chairman, Board of Trustees National Heroes Institute, Inc. Kananga, Leyte S i r : This refers to your request for exemption of the National Heroes Institute, Inc., Kananga, Leyte, from the payment of income tax and the filing of the corresponding income tax return under Section 27(e) of the Tax Code. It appears that the National Heroes Institute, Inc., (hereinafter referred to as the Institute) was originally the Leyte Bible School and in 1957 became the present school which was operated only under a special permit by the Bureau of Private School and in 1967 it was incorporated as a non-stock and non-profit educational institution exclusively for religious and educational purposes, i.e., "to establish, operate and maintain a complete academic and vocational high school where arts, science and other academic and vocational courses of instruction are taught and demonstrated." The Institute is maintained and financed by means of tuition fees, entrance fees and matriculation fees; and that no part of its net income inures to the benefit of any individual. In view of the foregoing, this Office is of the opinion and so holds that the Institute is exempt from the payment of income tax under Section 27(e) of the Tax Code. The Institute is, however, subject to income tax on income derived from any of its properties, real or personal, or from any activity conducted for profit, regardless of the disposition made of such income. If it has not earned any taxable income, it is also exempt from the filing of income tax returns. Moreover, the Institute 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 substantial change in its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income pursuant to Revenue Regulations No. 7-64 dated November 4, 1964. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue