BIR Ruling

June 14, 1976 Davao Filipino-Chinese Hong Un Charitable Association, Inc. Davao City Attention: Mr . Ramon Filoteo Haw 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(e) of the Tax Code. Investigation conducted by this Office disclosed that the Davao Filipino-Chinese Hong Un Charitable Association, Inc.,is a non-stock, non-profit organization duly registered with the Securities and Exchange Commission; that the purposes for which the Association was organized are: 1) To develop, cultivate, advance and promote the economic, social and cultural welfare and prosperity of the community; 2) To foster a stronger and more active fellowship and comradeship among the members and their families; 3) To give financial and charitable assistance to its members and their families in cases of death, fire, flood and other calamities or emergencies, from funds voluntarily given by members; 4) To encourage and develop interest in arts, dramatics and music among its members and their families; 5) In general, to take all such steps as might be necessary or proper for the improvement and amelioration of the individual welfare of the members of said corporation, specifically those relating to the social, economic and other phases of their lives, and to do and perform any and all such things as might be necessary, proper or convenient for the due carrying out of the purposes of the corporation, and to exercise any and all rights, powers and attributes of other like corporations organized under and by virtue of the laws of the Republic of the Philippines; that the Association is maintained from contributions and donations from the members, and such property and money as may from time to time be received or acquired by deed, grant, lease, bequeath or gift from the members and that no part of its net income inures or may accrue to the benefit of any member or individual. In view thereof, since the Davao Filipino-Chinese Hong Un Charitable Association, Inc., Davao City, falls within the purview of a corporation organized and operated exclusively for cultural and charitable purposes, pursuant to Section 27(e) of the Tax Code, it is exempt from the payment of income tax on income earned by it as such corporation and, therefore, need not file an income tax return covering such income. However, it is subject to income tax on income derived from any of its properties, real or personal, or any activity conducted for profit, regardless of the disposition thereof, which income should be returned for taxation. Such being the case, that Association should file a return declaring therein its rental income which is subject to tax. And even if no taxable income is earned, it should file on or before April 15 of each year, an annual information return under oath stating its gross income and the sources thereof and the expenses incurred during the preceding year, attaching thereto; (a) a profit and loss statement; (b) a balance sheet; and (c) a certification attesting that there has not been any change in its By-Laws, Articles of Incorporation and its activities and manner of operation. aisa dc Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN 1456-040-3