BIR Ruling

May 12, 1972 The Director Sacred Heart School of Tacloban City, Incorporated Tacloban City Reverend Father : This refers to your request for exemption from the payment of income tax and filing of the corresponding income tax returns under Section 27(e) of the Tax Code. Investigation disclosed that the Sacred Heart School of Tacloban City, Incorporated (hereinafter referred to as the School) is a non-stock and non-profit religious and educational corporation duly registered with the Securities and Exchange Commission; that the purpose for which the school was established is to teach and educate; that starting only as an elementary school, it now offers some high school courses; that the School is actually managed and operated by Chinese Catholic priests belonging to the Society of the Divine Word who also minister to the spiritual needs of the pupils and the community in general; and that the School is maintained by means of donations, students' tuition fees, other incidental fees and contributions of the members; and that no part of its net income inures or may inure to the benefit of any private individual or shareholder. In view of all the foregoing, this Office believes and so holds that the Sacred Heart School of Tacloban City, Incorporated falls within the purview of a corporation organized and operated exclusively for educational and religious 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 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, 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 Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue