BIR Ruling

August 21, 1973 Davao Association of Colleges and Schools, Inc. Davao City O-404 Attention: Mr . Emilio P . Palma Gil President Gentlemen : This refers to your letter dated May 15, 1973 requesting exemption from the payment of income tax and filing of the corresponding income tax return under Section 27(e) of the Tax Code. cd Investigation disclosed that the Davao Association of Colleges and Schools, Inc. (hereinafter referred to as the corporation) is a non-stock and non-profit corporation duly registered with the Securities and Exchange Commission; that the purposes for which the corporation is formed are: 1. An important instrument of education to develop the intellect and the ability to judge among the Filipino people. It hands to the cultural legacy of the Philippines and fosters a sense of values and the preparation for responsible community life as seen by the needs of Mindanao. It promotes friendship among students of different talents and cultural backgrounds and establishes a center whose work must be shared together by families, teachers, associations that foster cultural, civic and religious life, civil society and the entire community; 2. a) To create a special atmosphere animated by the spirit of freedom and charity; b) To help youth grow as the new creatures they were made by baptism; c) To order the shole of human culture to the news of salvation; d) To promote the good of the earthly city; e) To prepare students for service in the spread of the kingdom of God; f) To foster dialogue between the Church and mankind to the benefit of both; g) To hold dear those who are not Christian students attending school; and 3. To provide a common agency for the member schools of Davao in their relations with other organizations in the area, and with the Bureau of Private Schools. that the corporation shall be maintained by dues or fees assessed among its members based on the population or enrollment of each member-schools; and that no part of its net income inures to the benefit of any private individual. In view thereof, this Office is of the opinion and so holds that the Davao Association of Colleges and Schools, Inc. falls within the purview of a corporation or association organized and operated exclusively for religious, educational and charitable 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. If it has not earned any taxable income, it is also exempt from the filing of income tax returns. However, the corporation 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. cdtech Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."