BIR Ruling

January 25, 1972 Very Rev. Joseph Chen School Head St. Joseph School Panganiban Street Naga City Very Rev. Father : This refers to your letter dated February 24, 1971 requesting exemption of the St. Joseph School from the payment of income tax and filing of the corresponding income tax return under Section 27(e) of the Tax Code. Investigation disclosed that the Saint Joseph School (Naga City) Inc., 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 give a sound, complete and Catholic education to children and youth in the Philippines and to promote their intellectual and moral development; that the school offers a complete six years elementary course and complete four years secondary course, duly recognized by the Government; that the place where the school is to be established and located is at Naga City, Camarines Sur; that the school shall have a board of trustees which shall be composed of five (5) members of the corporation and of the Roman Catholic Church; that the trustees shall serve for a term of the Roman Catholic Church; that the trustees shall serve for a term of one year from and after the date of their election and until their successors are elected and duly qualified; that the school shall be maintained by means of tuition, matriculation, library, laboratory and fees of similar nature necessarily connected with its educational purpose and with the help of the Propagation of the Faith, Rome, and the donation and contributions of the Naga Filipino-Chinese Catholic Association; and that no part of its net income inures to the benefit of any private individual or shareholder. In view of all the foregoing, this Office believes and so holds that the Saint Joseph School (Naga City), 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 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. 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. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue