BIR Ruling [UN-202-94]

July 8, 1994 BIR RULING [UN-202-94] UPLB Foundation Inc. College, Laguna 4031 Attention: Corazon T . Aragon Executive Director M a d a m : This refers to your letter dated October 11, 1993 stating that you are a non-political, non-stock, non-profit corporation duly registered with the Securities and Exchange Commission (SEC). The purpose of the said foundation is to assist the University of the Philippines at Los Baos (UPLB) in expanding and optimally utilizing its human, financial and material resources towards accelerated agricultural and rural development. The source of income of the foundation is the administrative overhead cost being granted by the donor agencies to the University based on the stipulation of the Omnibus Agreement between the University and UPLBFI. As a non-profit corporation, no income of UPLBFI shall accrue to the pecuniary interest/benefit of any of its member nor any other private individuals or entities. UPLBFI activities are to initiate, conduct, manage and or evaluate research and development projects. Funded projects (e.g. University Bookstore (UBS), the Integrated Livestock Production Project (ILPP) etc., are subsidized research studies and any revenue derived in implementing these activities are deducted from the amount loaned out by UPLBFI to these projects. cdtech Based on the foregoing, you now seek for a ruling that UPLB Foundation Inc. as well as its funded projects be exempted from the value-added tax. In reply, please be informed of the following: 1. As a non-political, non-stock, non-profit corporation UPLBFI is exempt from income tax on income received by it as such under Section 26 of the NIRC. However, the income of whatever kind and character from any of its properties, real or personal, or from any activity conducted for profit, regardless of the disposition of such income shall be subject to tax imposed under the Tax Code. 2. The consideration received by UPLBFI in connection with its activity of initiating, conducting, managing and/or evaluating research and development projects is subject to 10% value-added tax (VAT) pursuant to Section 102 of the Tax Code, as amended. (BIR Ruling 102-074-92) Very truly yours, ALICIA P. CLEMENO Acting Assistant Commissioner (Legal Services)