BIR Ruling

January 30, 1970 Mother Natividad Pilamil O. P. Chairman, Board of Trustees Siena School of Naga Naga, Cebu Reverend Mother : This refers to your letter dated December 31, 1966 requesting exemption of the Siena School of Naga, Naga, Cebu from the payment of income tax under Section 27(e) of the Tax Code. cdti Investigation disclosed that the Siena School of Naga (hereinafter referred to as the School), was established and organized on December 30, 1965 as a nonstock and non-profit corporation exclusively for religious and educational purposes i.e., "to give sound, complete and catholic education to children and youth in the Philippines and to promote their intellectual and moral development"; that the School is financed and maintained by means of tuition and other fees which it may collect from the students; 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 School is exempt from the payment of income tax under Section 27(e) of the Tax Code. The School 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 had not earned any taxable income, it is also exempt from the filing of income tax returns. Moreover, the School 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. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue