Kapisanan ng mga Brodkaster sa Pilipinas Exempt from Payment of Income Tax

October 4, 1985 BIR RULING NO. 176-85 27-h 000-00 176-85 Gentlemen : This refers to your request for exemption from the payment of income tax and the filing of the corresponding income tax return under Section 27 of the National Revenue Code, as amended. Investigation conducted by this Office disclosed that the Kapisanan Ng Mga Brodkaster Sa Pilipinas (KBP) is a non-stock, non-profit organization duly registered with the Securities and Exchange Commission: that the purposes for which the corporation is formed are: (1) to work for the professionalization of the broadcast industry with the end in view of elevating the standards of mass media in the Philippines; (2) to enhance and develop mass media as an instrument to attain social change and to make the objectives and goals of the association conform with that of the New Society; (3) To work for the effective dissemination of information originating from the different government agencies to all sectors of the broadcast industry; and (4) to work in close consultation with advertisers and advertising agencies in all matters affecting each other mutually, and to set up guidelines, rules and regulations to be applied uniformly to all; that the corporation shall be maintained through contributions, dues, donations, grants, devise, gift or bequest from its members and that no part of its net income insures to the benefit of any private individual or member. cdta In this connection, it is represented that KBP has been registered with the BIR (Certificate of Registration No. 0920 dated June 30, 1982) as a qualified donee institution under BIR-NEDA Regulations No. 1-81, implementing Section 30 (h)(1) of the Tax Code. Based on the foregoing, therefore, this Office is of the opinion and so holds that the Kapisanan Ng Mga Brodkaster Sa Pilipinas falls within the purview of a club organized and operated exclusively for non-profitable purposes as contemplated under Section 27(h) of the National Internal Revenue Code, as amended. Accordingly, it is exempt from the payment of income tax in respect of income received by it as such organization and, therefore, need not file an income tax return concerning such income. However, it is subject to the corresponding internal revenue taxes imposed under the National Internal Revenue Code on its income derived from any of its income derived from any of its properties, real or personal, or any activity conducted for profit regardless of the disposition thereof, which income should be returned for taxation pursuant to Section 27 of the Tax Code, as amended by Presidential Decree No. 1457 . Moreover, it is required to file on or before April 15 of each year a profit and loss statement and balance sheet with the annual information return under oath, stating its gross income and expenses incurred during the year and a certificate showing that there has not been any change in its By-Laws, articles of Incorporation, manner of operation and activities, as well as sources and disposition of income. For income tax purposes, it is requested that a copy of this letter granting the aforesaid exemption from income tax be attached to the annual information return which you will file on or before April 15 of each year. Finally, please be informed that donations and/or contributions made to you are not, for income tax purposes, deductible either in full or subject to the 6% or 3% limitation, from gross income of the donor or contributor. Section 30(h) of the Tax Code enumerates the donations and/or contributions which are deductible for income tax purposes and those made to donees like you are not included in the enumeration. Accordingly, the Certificate of Registration No. 0929 dated June 30, 1982, allowing full deduction of the donations or contributions to you from the gross income of the donor or contributor, is hereby revoked. cdti Very truly yours, (SGD.) TOMAS C. TOLEDO Acting Commissioner