BIR Ruling

June 16, 1969 Philippine Academy of Sakya 1133 Benavides St., Manila Attention: (Rev . ) Biao Khim School Director Gentlemen : This refers to your letter dated February 18, 1969 requesting exemption of the Philippine Academy of Sakya, 1133 Benavides St., Manila, from the payment of income tax and filing of the corresponding income tax return under Section 27(e) of the Tax Code. cdi Investigation disclosed that the Philippine Academy of Sakya (hereinafter referred to as the School) is a non-stock and non-profit educational institution duly registered with the Securities and Exchange Commission; that the School is a subsidiary of the Seng Guan Buddhist Temple, Inc., 1176 Narra St., Tondo, Manila, which is a non-stock and non-profit religious corporation organized and existing under the laws of the Republic of the Philippines, and which was previously granted tax exemption by this Office pursuant to Section 27(e) of the Tax Code; that the School was organized for the purpose of giving education to the children of indigent families of the community, thus helping the government fulfill its educational program to the people; that the School derives its income from tuition fees of the students, medical and dental fees, school bus and fair receipts and subsidy from the Seng Guan Buddhist Temple, Inc., that such income is used for its maintenance, payment of the salaries of its teachers and such other expenses that are needed for its operation as an educational institution; and that no part of such income inures or may inure to the benefit of any private stockholder or individual. In view of the foregoing, this Office is of the opinion as it hereby holds that the Philippine Academy of Sakya is exempt from the payment of income tax under Section 27(e) of the Tax Code. 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. Moreover, it 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, Article of Incorporation, manner of operation and activities as well as sources and disposition of income. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue