Request for Tax Exemption as Non-stock Educational Institution

July 28, 1986 BIR RULING NO. 132-86 24-a 149-A-83 132-86 Gentlemen : This refers to your letter dated January 16, 1984 requesting for tax exemption as a non-stock educational institution. Documentary evidence submitted show that you are a non-stock educational corporation registered with the Securities and Exchange Commission on February 15, 1982 that you are engaged in the operation, management and administration of a kindergarten course or pre-school recognized by the Government as such, and the publication of books for the use of the school children; that your funds come from tuition fees of the school children and the proceeds from the publication of books. In reply, please be informed that under the foregoing facts, you are a non-stock private educational institution subject to the preferential tax rate of 10% on your taxable net income from operation of the school, related school activities and on passive investment income consisting of interests, dividends, royalties and the like prescribed by Section 24(a) of the Tax Code, as amended. However, dividends received by you from domestic corporations, shall be subject to the final intercorporate tax of 10% pursuant to Section 24(c) of the Tax Code. Moreover, in view of the amendment of Section 24(cc) (now Section 24(d)) in relation to Section 53(d)(1) (now Sec. 51(d)(1) of the Tax Code by P.D. No. 1959 which took effect on October 15, 1984, your interest and/or yield on deposit substitute instruments, and interest income on deposits paid or accrued beginning October 15, 1984 up to December 31, 1985 shall be subject to the final withholding tax of 15%; and to 17 1/2% final withholding tax beginning January 1, 1986 pursuant to Section 24(d) as amended by P.D. No. 1994. Likewise, as publisher of books, a 1% expanded withholding tax shall be imposed on gross payments to you beginning July 1, 1985 pursuant to Section 1(3)(2)(f) of Revenue Regulations No. 6-85, or the Revised and Consolidated Expanded Withholding Tax Regulations implementing Section 51(f) of the Tax Code as amended. Moreover, as publisher of books, you are subject to the annual fixed tax of P200.00 pursuant to Section 161(1) of the Tax Code and to the 4% contractor's tax imposed under Section 170 of the same Code, based on the gross receipts derived by you from the publication of those books. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner