Philippine-American Computer Education (PACE) College, Inc.

June 1, 2010 BIR RULING [NSNP-(S30H-005) 032-10] Sec. 27 (B); 30 (H); BIR Ruling No. 468-07; BIR Ruling No. 132-86 Philippine-American Computer Education (PACE) College, Inc. 2nd Floor, Cordenillo Building San Roque Extension Roxas City Attention: Mr. Timoteo J. Caa, Jr. Administrator/President Gentlemen : This refers to your letter dated July 31, 2008, which was referred to this Office by Revenue District Office No. 72, Roxas City, by way of its 1st Indorsement dated September 25, 2008, requesting for exemption from the payment of income tax and filing of the corresponding income tax return under Section 30 of the Tax Code of 1997. ASTcEa Documentary evidence submitted to this Office disclosed that the PACE is a non-stock corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. ENO95000394 dated October 14, 1996 with TIN 004-223-317-000; that it is certified by the Technical Education and Skills Development Authority (TESDA) with Registration Certificate No. VI-0036 series 2001; that the purposes for which the corporation was organized, among others, are as follows: 1. To engage in the pursuit of educational goals and objectives within the Philippines or in a foreign land insofar as may be permitted by law; 2. To raise capital for the establishment of the educational institution through, educational grants, donations, pledges educational exchange, loans, lease contracts from the different sectoral groups, organizations, private corporations, and individuals whether domestic or foreign; In reply thereto, please be informed that this Office had already occasion to rule on the matter when it said in BIR Ruling No. 132-86 dated July 28, 1986, which was later reiterated in BIR Ruling No. 468-07 dated August 24, 2007, as follows: ". . . under the foregoing facts, you are a non-stock private educational institution subject to the preferential tax rate of 10% on your taxable net income from operation of the school, related school activities and on passive investment income consisting of interests, dividends, royalties and the like prescribed by Section 24(a) of the Tax Code, as amended. However, dividends received by you from domestic corporations, shall be subject to the final intercorporate tax of 10% pursuant to Section 24(c) of the Tax Code. Moreover, in view of the amendment of Section 24(cc) (now Section 24(d)) in relation to Section 53(d)(1) (now Sec. 51(d)(1) of the Tax Code by P.D. No. 1959 which took effect on October 15, 1984, your interest and/or yield on deposit substitute instruments, and interest income on deposits paid or accrued beginning October 15, 1984 up to December 31, 1985 shall be subject to the final withholding tax of 15%; and to 17 1/2% final withholding tax beginning January 1, 1986 pursuant to Section 24(d) as amended by P.D. No. 1994. xxx xxx xxx" SUCH BEING THE CASE, this Office holds that your request for exemption from the payment of income tax and the filing of the corresponding income tax return is hereby DENIED for lack of legal basis. Accordingly, as a non-stock educational institution, PACE, being a proprietary educational institution, is subject to the ten percent (10%) tax imposed under Section 27 (B) of the Tax Code of 1997. CSTcEI This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) MARISSA O. CABREROS OIC-Assistant Commissioner Legal Service