Exemption granted to University of San Jose Recoletos and the University of Negros Occidental-Recoletos

March 29, 1988 BIR RULING NO. 125-88 24 002-88 125-88 Gentlemen : This refers to your letters dated November 21, 1987 and January 26, 1988 requesting a ruling in behalf of your clients, University of San Jose Recoletos and the University of Negros Occidental-Recoletos that both of them are exempt from taxes ad duties on their revenues and assets. It is represented that your abovementioned clients are non-stock, non-profit educational institutions; that both of them are activities of the Superior dela Corporacion Filipina de Padres Augustinos Recoletos, Inc., a religious corporation sole of the Augustinian fathers in the Philippines; that as a consequence, both of them do not have any separate charter; and that both were respectively granted university status by the Ministry (now Department), of Education, Culture and Sports effective September 21, 1934 and May 15, 1957. In reply, please be informed that the exemption contemplated under paragraph 3, Section 4, Article XIV of the 1987 Constitution refers to internal revenue taxes and customs duties, in appropriate cases, imposed by the national government on all revenues and assets on non-stock, non-profit educational institutions used actually, directly and exclusively for educational purposes. The abovementioned Constitution was ratified at a plebiscite held for the purpose on February 2, 1987. Accordingly, the tax exemption privilege of non-stock, non-profit educational institutions took effect as of said date. Such being the case, the University of San Jose Recoletos and the University of Negros Occidental-Recoletos being non-stock, non-profit educational institutions are exempt from taxes, e.g., 10% tax on its income as educational institution; 20% withholding tax on its interest income and/or yield on deposit substitute instruments and interest on its savings and time deposits; customs duties and value-added tax on its importation of books and other educational materials and equipment to be actually, directly and exclusively used for educational purposes. aisadc Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner