Exemption on the Profits of Union Club of the Philippines, Inc.

May 22, 1958 BIR RULING NO. 300-58 Mr. Aurelio Montinola President, Union Club of the Philippines, Inc. P.O. Box 516, Quezon City S i r : Reference is made to your letter of May 14, 1958, wherein you stated in effect that the Union Club of the Philippines, Inc., of which you were president, was a corporation organized and operated exclusively for pleasure, recreation and other non-profitable purposes, no part of the net income of which inured to the benefit of any private stockholder and member; that the life of said corporation expired on June 30, 1957 and that to facilitate its dissolution its properties were disposed of and converted into cash. You now would like this Office to confirm your opinion that the profit of the Club from the sale of its properties and the distribution of the net proceeds to club members incident to its dissolution are exempt from income tax. In reply thereto, I have the honor to inform you in the affirmative, it appearing from the attached copies of the articles of incorporation, audit report and other pertinent papers that the Union Club of the Philippines, Inc. is a social club within the purview of Section 27(h) of the Tax Code. As such social club, the sale of its property at a profit in furtherance of its purpose, to facilitate its dissolution, and the subsequent division of the net assets among the members, are exempt from income tax. (Mill Lane Club vs. Comm. of Internal Revenue, 23 T.C. 433; etc.) cdpr Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue