BIR Ruling

May 31, 1977 Exemption from the Payment of Income Tax under Sec . 27(g) 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(g) of the Tax Code. Investigation conducted by this Office disclosed that the Cagayan de Oro Women's Club, Puericulture Center and Maternity Hospital, Inc., were merged as one and duly registered with the Securities and Exchange Commission; that the Articles of Incorporation as well as the By-Laws of the new corporation were patterned after the models prescribed in Department Order No. 10 of the Department of Interior, which contained instruction concerning the work related to maternity, child hygiene and welfare, in pursuance to Act No. 2633, as amended by Acts Nos. 2905 and 2988; that the purposes for which the Corporation is formed are 1. the instruction and training of the mothers in the care of themselves and their children, to which and it is prepared: a) to maintain a Clinic for the examination and treatment of children especially those under two years of age for the verification of their state of health and development, and where pregnant woman can receive the proper instruction relative to their condition and the care of their offsprings after confinement; to establish maternity houses and community health centers, if means therefore become available; b) to have at their disposition, physician and nurses or licensed mid-wives and other personnels to instruct or visit women about to be confined, attend to them before and during confinement and to take care of and watch the new-born or other children giving necessary instructions about them; c) to promote baby contests and baby shows, giving lectures on the care of children, and carry out other plans to instruct the public, such as by the protection of maternity and child health; d) to organize festivities and shows for the purpose of obtaining funds for the maintenance of the institution; that the corporation shall be maintained by donations received in kind, cash or any other personal or real property of commercial values, by annual dues, which shall not be less than P2.00 and shall be regularly paid prior to March 31, of each year, by such appropriation as the province or municipality may make annually for the use the association, by such aid, as by law, may be granted by the Secretary of Health thru the Directors of hospitals, from revenues derived from benefits organized in the locality such as balls, theatrical functions, moving picture shows etc., and from the income derived from fees for services rendered; collected from beneficiaries of the activities of the association who can afford to pay, in accordance with a schedule adopted by the Board of Directors and approved by the Secretary of Health thru the Director of Hospitals and that no part of its net income inures or may accrue to the benefits of any member or individual. In view thereof, this Office is of the opinion so holds that the Cagayan de Oro City Women's Club Puericulture Center and Maternity Hospital, Inc., is 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. Accordingly, it is exempt from the payment of income tax as well as the filing of the 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 in its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. cdt