BIR Ruling No. 294-13

July 29, 2013 BIR RULING NO. 294-13 000-000 Diocese of Maasin Dialysis Center with Laboratory, Inc. Tunga-Tunga, Maasin City Southern Leyte Attention: Rev. Fr. Garnet John D. Quirong Treasurer Gentlemen : This refers to your letter dated 30 July 2012 for the issuance of a certificate of tax exemption enjoyed by a non-stock, non-profit organization pursuant to Section 30 of the Tax Code of 1997, as amended. HAaDcS It is represented that DIOCESE OF MAASIN DIALYSIS CENTER WITH LABORATORY, INC. with Taxpayer's Identification No. 421-285-540-000, is a non-stock, non-profit corporation duly organized under the laws of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Registration No. CN201227491; and that the purposes for which the non-stock non-profit domestic corporation is formed are to engage, conduct and/or manage any or all kinds of programs, projects or activities for health care services such as but not limited to the following: 1.) To establish, equip, operate and maintain a non-stock, non-profit Christian, compassionate and scientific dialysis center with laboratory and other services related thereto which will provide curative, rehabilitative and spiritual care to sick, diseased and/or disabled, particularly but not limited to the religious and the faithful within and outside of the Diocese of Maasin; 2.) To conduct and carry on informational, educational and other activities related to the maintenance and promotion of health including but not limited to the provision of facilities for medical researches according to the availability of facilities, funds, personnel and other necessities or requirements thereto; 3.) To provide adequate equipment and facilities. For this purpose it may create, construct, erect, build, extend, improve, expand, transfer, divide, reduce, remove or install offices, rooms, laboratories, research facilities, center branches or extensions, departments, units pharmacies, parking facilities, nurseries, medical, staff or patient accommodations or other Center facilities; authorize the purchase, importation, acquisition, lease, or servicing of medical equipment, fixture, facilities or other apparatus, parts or appurtenances thereof as may be necessary for the effective delivery of its services or in the furtherance of fulfillment of the purposes of its incorporation; In coordination with the private sectors particularly but not limited to the medical organizations or societies, concerned government agencies, religious organizations/institutions, and other concerned non-government organizations, domestic or foreign, and the doing of or performing of any and all kinds of acts or activities necessary, proper or convenient for, incidental or connected to the furtherance and/or implementation of the purposes or objectives of the corporation. Provided that purely professional medical or surgical services shall be performed be by duly qualified and licensed physicians or surgeons who may or may not be connected with the Diocese of Maasin Dialysis Center with Laboratory, Inc. STcDIE In reply, we regret to inform you that your request cannot be granted for lack of factual and legal basis. Please be informed that upon evaluation of the documents submitted to this Office, the purposes of DIOCESE OF MAASIN DIALYSIS CENTER WITH LABORATORY, INC. under its Articles of Incorporation do not qualify under any of the exempt corporation under Section 30 of the Tax Code of 1997, as amended. Notwithstanding that the Articles of Incorporation states that the DIOCESE OF MAASIN DIALYSIS CENTER WITH LABORATORY, INC. is a non-stock, non-profit corporation, it has to prove that it is really a corporation organized and operated as contemplated under Section 30 of the Tax Code of 1997, as amended, by actual exclusive operation for at least three (3) years. Being a non-stock and non-profit corporation does not, by this reason alone, completely exempt an institution from tax. (Commissioner of Internal Revenue vs. St. Luke's Medical Center, Inc. [G.R. No. 195909 & G.R. No. 195960, 26 September 2012]) Thus, statutes granting tax exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of tax exemption must be clearly shown and based on language in law too plain to be mistaken. Otherwise stated, taxation is the rule, exemption is the exception. The burden of proof rests upon the party claiming the exemption to prove that it is in fact covered by the exemption so claimed. (Quezon City and The City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation [G.R. No. 166408, 6 October 2008]) In view of the foregoing, your request for the exemption of DIOCESE OF MAASIN DIALYSIS CENTER WITH LABORATORY, INC. as a non-stock, non-profit corporation under Section 30 of the Tax Code of 1997, as amended, is hereby denied for lack of legal basis. cEATSI Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue