Taxability of Canteen Maintained to Cater to Hospital Employees

July 26, 1971 BIR RULING NO. 015-71 Canteen maintained to cater to hospital employees, taxability of . Pursuant to Section 191-A of the Tax Code, as amended by Republic Act No. 6110, where the restaurants, refreshment parlors and other eating places "are operated or maintained by clubs of any kind or nature (irrespective of the disposition of their net income and whether or not they cater exclusively to members or their guests) the keepers of the establishments shall pay the corresponding tax at the rates fixed above". In other words, under the present law even clubs and associations catering only to their members and the latter's guests, are subject to the percentage tax prescribed in Section 191-A, on the gross receipts of their restaurants, refreshment parlors and other eating places. Accordingly, even if the canteen will service mostly the personnel of the hospital and the profits it will earn will be used to defray the expenses of the hospital's charity clinic, it is nevertheless subject to the fixed tax and percentage tax prescribed in Section 182(A) (1) and Section 191-A, respectively, of the Tax Code, as amended by Republic Act No. 6110. aisa dc