Tax Exemption Granted to Sisters of Mary of Banneux, Inc.

September 2, 1988 BIR RULING NO. 431-88 24 178-88 431-88 Gentlemen : This refers to your letter dated June 27, 1988 requesting exemption of the Sisters of Mary of Banneux, Inc. from the 20% tax on its interest and/or yield on deposit substitute instruments and interest on its savings and time deposits to be actually, directly and exclusively used for its educational purposes. In reply thereto, 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. Such being the case, the Sisters of Mary of Banneux, Inc. being a non-stock, non-profit educational institution is exempt from the 20% withholding tax on its interest income and/or yield on deposit substitute instruments and interest on its savings and time deposits to be actually, directly and exclusively used for educational purposes. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner