Profits Earned by the Agrarian Reform Fund under EO No. 228

June 10, 1988 BIR RULING NO. 256-88 24 (a) 045-88 256-88 Gentlemen : This refers to your letter dated May 9, 1988 requesting a ruling on the following: cdtech "1. Whether or not the profits earned by the Agrarian Reform Fund under Executive Order No. 228 is subject to income tax; and "2. Whether or not the Bank as administrator of said Fund is under obligation to file the corresponding income tax returns." It is represented that pursuant to Section 15 of Executive Order No. 228 dated July 17, 1987 an Agrarian Reform Operation Fund (Agrarian Fund) was set up by the National Government to finance the Agrarian Reform Program of the government with you as the administrator thereof; that the said Agrarian Fund is treated "separate and distinct" from your funds and all earnings/profits, losses accruing/chargeable thereto are credited/debited to such Fund; and that you are of the opinion that since the Agrarian Fund is owned by the National Government, said Fund is not subject to income tax and you as its administrator is not under obligation to file the corresponding income tax return. In reply, I have the honor to inform you that your request is answered in the affirmative. It is noted that there is no provision in said Executive Order No. 228 which expressly provides that the earnings of the fund are exempt from taxation. The fact that the Fund was set-up by the National Government does not warrant said exemption. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner