BIR Ruling

June 7, 1967 Fr. Nicanor Lana University of San Agustin Iloilo City Reverend Father : This refers to your letter dated February 24, 1967 requesting exemption of the University of San Agustin Inc., Iloilo City, from the payment of income tax and the filing of corresponding income tax return under Section 27(e) of the Tax Code. It appears that the University of San Agustin hereinafter referred to as the University was established and organized on June 14, 1962 as a non-stock corporation exclusively for religious and educational purposes, i.e., "to conduct the University of San Agustin, giving a sound, complete, and Catholic education to children and youth in the Philippines, promoting their physical, intellectual, moral, and spiritual development, and undertaking other educational and charitable enterprises." The University is financed and maintained by means of tuition, entrance, matriculation, and other fees which it may collect from the student; 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 University is exempt from the payment of income tax under Section 27(e) of the Tax Code. The University is, however, subject to income tax on income derived from any of its properties, real or personal, or from any activity conducted from profit, regardless of the disposition made of such income. If it has not earned any taxable income, it is also exempt from filing income tax return. Moreover, the University 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. LLjur Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue