Tax Liability of United Seamen's Service

June 25, 1990 BIR RULING NO. 122-90 100 (a); 113, 114 000-00 122-90 Gentlemen : This refers to your letter dated June 5, 1990 stating that the United Seamen's Service is a non-stock, non-profit, social welfare organization that has established a branch office in the Philippines, the Manila International Seamen's Center; that your primary purpose is to provide social welfare and recreational services to all international and domestic seamen and women transiting the Port of Manila; that you routinely operate club-like, social centers which provide meals, organized sports and in-house recreational facilities, postal services, cable, telephone and telex services, libraries and reading rooms; and that your income is derived from contributions and sale of supplies and services, i.e., food, beverages, gift shop and occasionally room rentals. aisadc On the basis of the foregoing, you are requesting a ruling from this Office as to whether you are subject to the 4% and 8% caterer's tax imposed by Section 114 of the Tax Code, as amended by P.D. No. 1959. In reply, please be informed that pursuant to the last paragraph of Section 114 of the Tax Code as amended, reading: "Sec. 114. Caterer's Tax . A caterer's tax is hereby imposed as follows: xxx xxx xxx "Where the establishments enumerated above 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. (As amended by P.D. 1959)" exclusive non-profit clubs like you are subject to the percentage tax imposed by said section even if you do not derive any profit from the operation of the restaurant or bar and even if you render service to your members only. (BIR Ruling No. 71-006 dated May 26, 1971) Moreover, you are subject to the 10% value-added tax for operating a gift shop selling supplies and to the 12% hotel room tax on gross receipts derived from room occupancy respectively imposed by Sections 100(a) and 113, also of the Tax Code. casia Very truly yours, (SGD.) JOSE U. ONG Commissioner