BIR Ruling

August 23, 1971 Most Rev. Fr. Robert Cranley, SFM School Director Saint Anthony High School Anahawan, Southern Leyte Reverend Father : This refers to your request for exemption of the Saint Anthony High School, Anahawan, Southern Leyte from the payment of income tax and filing of the corresponding income tax return under Section 27(e) of the Tax Code. cdta It appears that the Saint Anthony High School (hereinafter referred to as the School) was organized as a non-stock corporation for the purpose of establishing an educational institution for the religious moral, academic, and industrial instruction of boys and girls; that the original capitalization of the School was raised out of the voluntary contributions of a group of parents and civic-spirited residents of Anahawan, Southern Leyte without sales of stocks nor mention of profit; that the School is financed and maintained by means of fees that it may collect from the students; that its income, if any, are spent for the maintenance, repairs and improvements of the School; and that no part of its net income inures to the benefit of any individual. Based on the foregoing facts, 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 has 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 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