BIR Ruling

November 19, 1969 Rev. Fr. Teodulo Cajigal Holy Rosary Academy Manaoag, Pangasinan Reverend Father : This refers to your letter dated October 28, 1966 requesting exemption of the Holy Rosary Academy, Pangasinan from the payment of income tax and the filing of the corresponding income tax return under Section 27(e) of the Tax Code. It appears that the Holy Rosary Academy (hereinafter referred to as the Academy), was established and organized on August 12, 1949 as a non-stock corporation exclusively for religious and educational purposes, i.e., "to promote the physical, intellectual, moral and spiritual welfare of the students." The Academy is financed and maintained by means of tuition fees and other fees which it may be collect from the students; and that no part of its net income inures to the benefit of any individual. In view of the foregoing, this Office is of the opinion and so holds that the Academy is exempt from the payment of income tax under Section 27(e) of the Tax Code. The Academy 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. However, the Academy 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 substantial change in its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income pursuant to Revenue Regulations No. 7-64 dated November 4, 1964. llcd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue