Exemption Granted to Divine Word University of Tacloban, Inc., Tacloban City

August 16, 1988 BIR RULING NO. 396-88 24 178-88 396-88 Gentlemen : This refers to your letter dated October 9, 1987 requesting exemption of the Divine Word University of Tacloban, Inc., Tacloban City from the 20% tax on its interest and/or yield on deposit substitute instruments and interest on its savings and time deposits. In reply, I have the honor to inform you that paragraph 3, Section 4, Article XIV of the 1987 Constitution provides, viz: "(3) All revenues and assets of non-stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties. . . . ." The aforementioned Constitution was ratified at a Plebiscite held for the purpose on February 2, 1987. Accordingly, the tax exemption privilege of non-stock, non-profit educational institutions took effect as of said date. cdtech Such being the case, the Divine Word University of Tacloban, Inc., Tacloban City, being a non-stock, non-profit educational institution is exempt from taxes e.g. 10% tax on its income as an educational institution; and 20% withholding tax on its interest income and/or yield on deposit substitute instruments and interest on its savings and time deposits; customs duties and value-added tax on its importation of books and other educational materials and equipment to be actually, directly and exclusively used for educational purposes. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner