BIR Ruling [DA-282-03]

August 26, 2003 BIR RULING [DA-282-03] 27 (D) (1); ENPS-003-2003 Philippine Health Insurance Corporation Citystate Centre, 709 Shaw Boulevard Pasig City Attention: Ms. Ann Marie C. San Andres Chief Accountant Gentlemen : This refers to your letter dated December 13, 2002 requesting clarification regarding the exemption from tax granted to Ateneo de Manila University per BIR Ruling No. 324-88 dated July 13, 1988, to the effect that the National Conference on Social Health Insurance in the Philippines to be undertaken by the Ateneo de Manila University Institute of Philippine Culture (ADMU-IPC) falls within its registered activities for tax exemption purposes. It is represented that Philippine Health Insurance Corporation (PHIC) and the ADMU-IPC had agreed to carry out and implement a community health program initiative which includes among others, the conduct of the National Conference on Social Health Insurance in the Philippines; that in consideration of the said undertaking and as provided in the contract, PHIC shall provide funds in the amount of P184,900 which will cover the payment for the wages of the presentors, facilitators, research assistants, documentors and support staff necessary for the implementation of the activity; that for the said activity, PHIC had already paid the amount of P85,726.38, net of 2% EWT and 6% GMP. ADMU-IPC is an auxiliary unit of the Ateneo de Manila University engaged in social science studies of Philippine Society and culture. As an auxiliary unit, the institute is a part of the Ateneo de Manila University, which is incorporated under Philippine law as a non-stock, non-profit private educational institution. (Article I, Charter of the Institute of Philippine Culture) Moreover, as stated in its charter, ADMU-IPC has the following purposes and aims: 1. To undertake social science research on Philippine society and culture particularly those focusing on issues of equity, change and human development with a basic-applicable orientation, that is, research which combines a basic theoretical approach together with application to problem solving; 2. To provide instruction, guidance, experience and facilities in the social science research process through a regular program of in-service training, as well as through formal and informal affiliation with the University school units; 3. To offer its researchers channels for the subsequent publication of their research results; 4. To seek opportunities for cooperation with other instrumentalities (either of the Philippine Province of the Society of Jesus or the University or other organizations) working directly with or doing research on the poor; 5. To assist staff members as well as persons from outside agencies in enhancing research skills and accomplishing their research agenda via training projects or grants-in-aid programs and the sharing of its expertise, experience and facilities. In reply, please be informed that inasmuch as the conduct of the National Conference on Social Health Insurance in the Philippines is a community health program initiative of ADMU-IPC, the same falls within the purposes and aims for which it was founded as provided for under Article II of its Charter. Therefore, as an auxiliary unit of the Ateneo de Manila University, which enjoys the tax exemption, the community health program of ADMU-IPC directly falls within the purposes and aims of the former, thus, all revenues, derived from the said program shall be exempt from taxes pursuant to paragraph 3, Section 4, Article XIV of the 1987 Constitution. (BIR Ruling No. ENPS-003-2003 dated January 20, 2003) 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group