Non-Stock, Non-Profit Hospital, Exemption form Tax

April 23, 1973 BIR RULING NO. 014-73 Non-stock, non-profit hospital, exemption form tax . It is represented that the hospital is a non-stock and non-profit corporation; that no part of its income inures to the benefit of any private stockholder or individual; that it is governed by trustees receiving no compensation; and that all the income of its pay wards go to the support of its charity ward. In the case of Collector vs. St. Paul's Hospital of Iloilo, G.R. No. L-12127, May 25, 1959 and Collector vs. Convention of Philippine Baptist Churches G. R. No. L-11807, January 28, 1961, the facts of which are similar to those obtaining in the instant case, the Supreme Court ruled that the hospitals being operated by the corporations involved therein were not engaging in business and for profit. Accordingly, in the operation of the hospitals, said corporations were not subject to the privilege taxes on business imposed by the National Internal Revenue Code. In line with the foregoing decisions of the Supreme Court, it is the opinion of this Office, as it hereby holds that the aforesaid hospital is not engaged in business. Accordingly, it is exempt from the 3% contractor's tax imposed in Section 191 of the Tax Code, as amended by Presidential Decree No. 69, which is a tax on business.