BIR Ruling

November 21, 1975 Cebu Tennis Club, Inc. Banilad, Cebu City Attention: Mr . Marcelino L . Bontuyan President Gentlemen : 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(h) of the Tax Code. Investigation conducted by this Office disclosed that the Cebu Tennis Club, Inc., (hereinafter referred to as the Club), is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission; that the purposes for which it is formed are: 1) To promote tennis and other forms of sports activities among its members, the public in general, and the youth in particular; and to provide a meeting place for such fraternal, social, and recreational purposes as its members may from time to time deem proper; 2) To promote tennis and other tournaments, games, other sports activities, to be participated in by local, regional, national, and/or foreign players or contingents; 3) To offer to the nation, particularly to civic bodies, churches, teachers and students of universities, colleges, high schools, and primary schools and opportunity to participate in a program of sports and athletic awareness and improvement, especially among the youth; 4) To cooperate closely with the government in the carrying out of this program of sports and athletic upliftment and improvement. It appears also that the Club is maintained by its income derived from membership fees, dues, and donations from civic-spirited and sports minded persons, Philippine Charity Sweepstakes, Cebu City Government and that such income has been exclusively used to defray the necessary expenses for the accomplishment of the purposes of the Club. In view of the foregoing, this Office believes and so holds that the Cebu Tennis Club, is a social Club failing within the purview of a club organized and operated exclusively for pleasure, recreation and other non-profitable purposes, as contemplated under Section 27(h) of the Tax Code. See (Sec. 33, Revenue Regulations No. 2). Accordingly, it is exempt from the payment of income tax as well as the filing of income tax return. 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. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3