BIR Ruling

May 9, 1968 The Chairman 1968 Red Cross Fund Drive Philippine National Red Cross P.O. Box 280, Manila M a d a m : This refers to your letter dated May 9, 1968 requesting exemption from the payment of the amusement tax on the admission fees to the benefit roadshow presentation of the film "In the Best of the Night" which the Philippine National Red Cross will sponsor from May 15, to June 13, 1968 at the Odeon and Lyric Theaters, the proceeds of which will be used to held the thousands of evacuees displaced by the recent Mayon Volcano eruptions. In reply, I have the honor to inform you that the Philippine National Red Cross being a public corporation created "to assist the Republic of the Philippines in discharging the obligations set forth in the Geneva Red Cross Convention and to perform such other duties as are incumbent upon the National Red Cross Society" and "a charitable organization operated as an agency of the Republic of the Philippines" is considered as performing governmental functions and, therefore, may be entitled to 100% exemption from the amusement tax imposed by Section 260 of the Tax Code. However, in order to be entitled to exemption, the following conditions and requirements must be met: 1. That the show or exhibition is actually undertaken by the beneficiary organization for and in its own behalf and exclusively for its benefit and not merely sponsorship in name; 2. That the beneficiary organization shall print its own tickets with prices above the ordinary prices charged during regular showings, and such tickets should be sold and distributed by the sponsoring institution. 3. That there should be a showing of contract between the distributor and the theater-owner with the sponsoring organization; 4. That a complete accounting should be submitted to the Bureau of Internal Revenue, indicating the number of tickets sold, classified according to prices thereof and showing the corresponding serial numbers, the gross receipts or income derived from the show and the expenses incurred thereon. The said report should contain a certification by the President or responsible official of the beneficiary organization or association that the income from the show or exhibit sought to be exempted has inured or will inure exclusively to its benefit. cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue