BIR Ruling No. 301-82

November 29, 1982 BIR RULING NO. 301-82 027-f 183-81 301-82 Philippine Chamber of Handicraft Industries, Inc. 7th Floor, Tuazon Gonzales Bldg. 356 Gen. Solana St., Intramuros M a n i l a Attention: Ms . Rose D . Teodoro President Gentlemen : This refers to your letter dated October 26, 1982 requesting exemption from all taxes in connection with an Export Bazaar Sale which you are holding on December 3 to 12, 1982. It is represented that the Philippine Chamber of Handicraft Industries, Inc. (PCHI) recognizing the need for an intensified promotion of Philippine handicrafts in the local market to increase awareness and appreciation among local buying public to said products is holding an Export Bazaar Sale from December 3 to 12, 1982; that the objectives of the said Export Bazaar Sale are: (1) to give the local buying public a chance to see the range of export products of PCHI members which are normally not available in the local market; (2) to serve as a promotional undertaking, whereby the PCHI would be further known as the trade association of leading handicraft entrepreneurs of the country and its objectives to be further espoused; (3) to serve as a vehicle for PCHI members to dispose of their excess inventories; and (4) primarily, to raise funds for the chamber; that the Export Bazaar also intends to showcase a superlative selection of export products of PCHI members at one time in one place; and that the PCHI is a non-stock, non-profit trade association. In reply thereto, I have the honor to inform you that under the foregoing representation, that association is a business league not organized for profit and if no part of its net income inures to the benefit of any private individuals or members, in the absence of a certificate of tax exemption from this Office, it may consider itself as a tax-exempt institution exempt from income tax and the filing of an income tax return, in accordance with Section 27(f) of the Tax Code. (See Collector vs. Sinco, G.R. No. L-9276, October 23, 1956) Accordingly, proceeds from the sales of Philippine handicrafts derived by that Association and in furtherance of the purposes for which it was organized are not subject to income tax. Moreover, since that Association is exempt from income tax as a business league because it is not organized for profit, said sales are also exempt from business taxes. However, that Association 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. In this connection, if during the bazaar, individual members of that Association derive sales for their own personal benefit, said members are subject to income and business taxes. Very truly yours, RUBEN B. ANCHETA Acting Commissioner