BIR Ruling

May 29, 1969 Sister Mary Christine Tan The Philippine Province of the Good Shepherd, Inc. 1027 Aurora Boulevard Quezon City Sister : This refers to your letter dated April 8, 1969 requesting exemption of the Philippine Province of the Good Shepherd, Inc. from the payment of income tax and the filing of the corresponding income tax return under Section 27(e) of the National Internal Revenue Code. casia It appears that the Philippine Province of the Good Shepherd, Inc. (hereinafter referred to as the Corporation) is a non-stock and non-profit religious-charitable corporation duly incorporated under the laws of the Philippines; that the purposes for which said corporation is formed are as follows: (a) to help the State in conserving the social order and well-being of the community and in the moral uplifting of girls and women; (b) to organize, establish, support, direct or administer institutions for girls, with the primary object of caring, guiding, and rearing the misguided and delinquent or problem girls and women and minors who are in moral danger or who are morally abandoned and to guide, rear and care them for their moral reform and rehabilitation, and their intellectual and social welfare in the best manner appropriate; (c) to receive, as far as the convenience and means of the house will permit, girls and women who shall be presented by competent authorities or their families for moral reform and rehabilitation or those who voluntarily present themselves for this purpose; (d) for the better realization of these purposes, the corporation may organize, establish and administer schools, colleges or similar institutions for children and girls; and (e) to exercise supervision and control over the missions, houses, schools, colleges or similar institutions organized for the herein purposes under its jurisdiction; that the direction and management of the affairs of the Corporation shall consist of five (5) members who are to serve until their successors are duly elected and qualified as provided in the By-Laws; that the Corporation derives no income from its properties or from any activity conducted for profit; that if said Corporation derives any income from any source whatsoever, it is merely incidental to its activities as a non-stock and non-profit religious-charitable corporation; that no part of its income, if any, inures or accrues to the benefit of any private individual or shareholder; that said Corporation shall be maintained by charitable contributions given by the faithful in the form of money and/or property, subject to the provisions of Republic Act No. 4075 and income from home industries, tuitions, fees and board from schools and colleges; that the funds of the Corporation shall consist of donations, contributions, accounts and other income of the Corporation and other property that might be given to the Corporation; that expenses of the officers and the employees of the Corporation and other institutions under the jurisdiction of the Corporation, shall be deducted from the funds of the Corporation; that in case of dissolution of the Corporation for any cause whatsoever, the funds of the Corporation shall be turned to another entity, persons or authority, which must be designated by the members in a general meeting called for the purpose; and that the funds granted to the Corporation under par. (d) of Section 6 of Republic Act No. 1169 shall be used for no other purpose than those authorized by the Board of Trustees of the Philippine Charity Sweepstakes Office and that any property acquired or which may be acquired with the said funds shall not be sold or otherwise disposed of without the approval of the President of the Philippines, and in the even of the dissolution of the Corporation, all such properties shall be transferred to and shall automatically become the property of the Republic of the Philippines. Based on the foregoing facts, this Office is of the opinion and so holds that the Philippine Province of the Good Shepherd, Inc. is an exempt organization within the purview of 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 of its activities conducted for profit, regardless of the disposition made of such income. If it has not earned any taxable income, it is likewise exempt from the filing of income tax returns. It may also be stated in this connection, that while the Philippine Province of the Good Shepherd, Inc. is exempt from the filing of the annual income tax returns, and the registration of its books of accounts and other records, it is nevertheless required to file on or before April 15 of each year, a balance sheet, profit and loss statement and an 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. This ruling shall be revised, modified, or revoked if upon verification the actual facts are different from those represented. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue