BIR Ruling No. 372-61

No date supplied BIR RULING NO. 372-61 Reference is made to your letter . . ., requesting confirmation of your opinion that, under the following circumstances, your client, the . . . Club, Inc., is exempt from the fixed and percentage taxes imposed upon restaurants and bars and from the income tax: llcd "As a Club, this client has for its primary objective the promotion and fostering of the game of golf and the maintenance of a golf course and country club. "For its operation, the club would depend upon the funds derived from membership dues, green fees, proceeds from recreational facilities and receipts from its bar and restaurant where it would sell wines, liquors and food to its members, their families and friends. "Its articles of incorporation and by-laws do not provide for the accumulation of profits, much less for their distribution to any shareholder. Any profit that may be derived from its operation would be utilized in the improvement of its facilities." In answer thereto, I have the honor to inform you that on the basis of the aforequoted circumstances and in line with the decisions of the Supreme Court in the cases of the Collector of Internal Revenue vs. The Manila Elks Club et al. (G.R. No. L-11176, June 29, 1959) and Manila Polo Club vs. Meer (G.R. No. L-10854, Jan. 27, 1960), this Office shares the view that your client is not engaged in "business" and, therefore, not subject to any business tax. Based also on those circumstances, your client is exempt from the income tax, pursuant to Section 27(h) of the Tax Code. cdasia