BIR Ruling

March 14, 1974 St. John Bosco Academy, Inc. Tarlac, Tarlac Attention: Rev . Fr . George Schwarz S . D . B . Director Gentlemen : This refers to your letter dated October 27, 1972 requesting exemption from the payment of income tax under Section 27(e) of the Tax Code in relation to Section 24 of Revenue Regulations No. 2. cdta As represented, St. John Bosco Academy, Inc. is a non-stock, non-profit, religious educational corporation organized under the laws of the Philippines; that the purpose for which such corporation has been organized is to teach the arts, sciences and other studies embraces in a primary, intermediate, and high school course of instruction in accordance with the principles of the Roman Catholic Religion; that the corporation shall be maintained by means of tuition and entrance fees, matriculations; that the school derives no income from its properties or from any activity conducted for profit; that if said corporation derives any income, from any source whatsoever, it is merely incidental to its activities as non-stock, non-profit, religious-educational and other related activities; and that no part of its income, if any, inures or accrues in the benefit of any private individual or shareholder. Based on the foregoing representations, this Office is of the opinion as it hereby holds that the St. John Bosco Academy, Inc. falls within the purview of a corporation or association organized and operated exclusively for religious and educational purposes as contemplated under Section 27(e) of the Tax Code. Accordingly, it is exempt from the payment of income tax. It is however, subject to the income tax on income derived from any of its properties, real or personal, or from any activities 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 the income tax returns. However, it is required to file on or before April 15 of each year a profit and loss statement and a 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. Finally, please be informed that pursuant to Section 24(a) of the Tax Code, as amended by Presidential Decree No. 305, beginning the calendar year 1974, and fiscal year beginning July 1, 1974, as the case may be, non-stock private educational institutions, e. g., St. John Bosco Academy, Inc. are already subject to a tax of 10% of the taxable net income from the operation of the school, related school activities, and on their passive investment income consisting of interest, dividends, royalties and the like. 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."