BIR Ruling [DA-041-06]

February 13, 2006 BIR RULING [DA-041-06] Section 30 (C); DA-158-2003 Valley Golf and Country Club, Inc . P.O. Box 202 Q Plaza, Cainta Attention: Mr. Lawrence C. Olizon General Manager Gentlemen : This refers to your letter dated August 18, 2005 requesting for an opinion on the exemption from income tax of the monthly membership dues billed to your members who are stockholders or assignees of stockholders. It is represented that Valley Golf and Country Club, Inc. is a corporation duly organized and existing under Philippine laws; that you are a non-profit corporation organized mainly to foster and promote the game of golf and operate and maintain a golf course and country club for social and recreational activities; that no part of its net income inures to the benefit, directly or indirectly to any of its members or stockholders; that membership dues billed are collected from the members primarily to cover expenses related to the maintenance of the golf course facilities and premises of the club; and that any excess membership dues over any maintenance expense are utilized for the improvements of the club facilities. In reply, please be informed that since membership dues are not income derived from real or personal property, or from any activity conducted for profit, said membership dues are not subject to income tax and consequently to the withholding tax. (BIR Ruling No. S-30-26-01 dated March 28, 2001 and undated BIR Ruling No. 103-79) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. EcSCAD Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service