BIR Ruling

November 25, 1976 Business League Defined; Exemption from Income Tax This refers to your request on behalf of your client, the ABCD Society, Inc., for exemption from the payment of income tax and the filing of the corresponding income tax return under Section 27 of the Tax Code. Investigation conducted by this Office disclosed that your client, the ABCD Society, Inc., is a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission; that the purposes for which the Association is formed are: 1) To promote Philippine-foreign relations in general and in particular to establish closer cooperation in those areas which will enhance the growth of the Philippines, 2) To provide a forum for those interested in Philippine-foreign trade and commerce, 3) To establish a channel of communication with its counterparts in abroad and with other agencies and organizations concerned with Philippine-foreign relations, 4) To cooperate with and extend assistance to instrumentalities and organizations in the study, formulations and implementations of economic policies in so far as Philippine-foreign relations are concerned, 5) To support efforts that will redound to mutually beneficial relations between the Philippines and other nations; that the corporation shall be maintained and financed by annual membership dues and that no part of its net income shall inure or accrue to the benefit of any individual. Based on the foregoing facts, this Office believes and so holds that your client, the ABCD Society, Inc., Port Area, Manila, is a business league as contemplated under Section 27(f) of the Tax Code because it is an association of persons having some common business interest, which limits its activities to work for such common interest and does not engage in regular business of a kind ordinarily carried on for profit. (Sec. 31, Rev. Regulations No. 2). Accordingly, said Corporation is exempt from the payment of income tax as well as the filing of 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 of its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. cdtech