10% Tax on an Income as a Private Educational Institution

June 6, 1988 BIR RULING NO. 247-88 24 000-00 247-88 Gentlemen : This refers to your letters dated October 17, 1987 and January 12, 1988 requesting exemption from the 10% tax on your income as a private educational institution prescribed under Section 24(b) of the Tax Code, as amended by Executive Order No. 37; the 20% tax on your interest and/or yield on deposit substitute instruments and interest on your savings and time deposits; dividends and gains from investments in stocks; and customs duties on importation of books and other educational materials and equipment to be actually, directly and exclusively used for your educational purposes. cdt In reply thereto, please be informed that paragraph 3, Section 4, Article XIV of the 1987 Constitution provides, viz: "(3) All revenues and assets of non-stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties. . . ." As shown in your Articles of Incorporation, it appears that you are a non-stock corporation. However, there is no showing that you are a non-profit corporation which means that no part of your income inures directly or indirectly to any individual or member. (Sec. 1.4, Department Order No. 137-87 implementing the aforesaid provision of the Constitution) Moreover, under your Articles of Incorporation, you are also engaged in charitable and socio-civic activities for the betterment of Philippine masses. This shows that your revenues and assets are not used actually, directly and exclusively for educational purposes. In view thereof, your request for exemption under the aforesaid provisions of the Constitution is hereby denied. cdti Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner