BIR Ruling No. 312-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Section 30H of the NIRC of BIR Ruling No. 466-2014 1997. as amended: RMO No. 20-2013; RMC No. 051-14 SH30-Q3T2-Z0Z0

JUN 0 9 2020

TECHNOLOGY FOUNDATION.INC ASIAN COLLEGE OF SCIENCE AND

Proj. 3, Quezon City 1102 1013 ACSAT Center, Aurora Blvd. cor. JP Rizal.

Attention:CLAUDINE GLORIA S.LUCENTE

Corporate Treasurer

Gentlemen:

SCIENCE AND TECHNOLOGY FOUNDATION,INC.for tax exemption certificate being National Internal Revenue Code (NIRC) of 1997, as amended. enjoyed by non-stock, non-profit corporation or association under Section 30 (H) of the This refers to your undated letter, applying in behalf of ASIAN COLLEGE OF

was incorporated are: Company Registration No. FOUNDATION, INC. with BIR Taxpayer's Identification No. (TIN) non-profit association duly organized and existing under the laws of the Republic of the Certificate of Registration No. Philippines; that it is registered with the Securities and Exchange Commission (SEC) under It is represented that ASIAN COLLEGE OF SCIENCE AND TECHNOLOGY ; and that the purposes' for which the association dated January 01, 1997, is a non-stock, and

I. To organize, conduct and carry on the operation of educational institutions in Metro Manila and in other parts of the Philippines, giving collegiate education as well as technical and vocational courses either

standard of instruction and technical training in science and technology forms of modality, in order to help the Filipino youth in acquiring high and in other educational fields, in accordance with state of the arts directly or through distance education, e-learning franchising or other

2 To own, establish, maintain operate research and/or experimental authorized by the government; advance the frontiers ofeducation, science and technology and to secure, courses of study for use in connection with courses of study of this institution, and to grant diplomas, awards, titles and degrees as may be institutions here and abroad, to conduct seminars and conferences to to print and publish books, periodicals, magazines, pamphlets and methods andpractices of progressive educationalinstitutional

3 To purchase, build, lease, construct or otherwise acquire and own real stations, to act as patron of a benefactor, to any or fields of human endeavor including science and technology, the arts and sciences.

and personal property as may be necessary or useful to carry out the objectives and purposes of the educational institution.

1 Per Articles of Incorporation adopted on Julv 15. 2008.

ASIAN COLLEGE OF SCIENCE AND TECHNOLOGY FOUNDATION, INC. SH70-0312-2020 JUN 0 9 2020

PAGE2OF3

1 To offer services as assessment or testing center for various

Technical/Vocational skills and technologies for purposes of skills

certification as may be requested by any entity, Public or Private.

5 Generally, to do such other things and to conduct all educational activities and programs as may be directly conducive to the attainment

of the above objectives;

6. To do and perform various educational acts permitted by the law and in

accordance with regulations of the Department of Education, Culture,

and Sports or of the Commission on Higher Education.

In reply, please be informed that Section 30 of the National Internal Revenue Code of

1997. as amended, enumerates the non-stock and/or non-profit corporations/associations/

organizations that are exempt from income tax in respect to income received by them as such.

Section 30 (H) of the National Internal Revenue Code of 1997, as amended, provides, viz:

"Sec. 30. Exempt from Tax on Corporations. - The following organizations

shall not be taxed under this Title in respect to income received by them as

such:

XXX xxx XXX

(H) A nonstock and nonprofit educational institution;

XXX XXX XXX "

"Non-stock" means "no part of its income is distributable as dividends to its members.

trustees, or officers" and that any profit "obtained as an incident to its operations shall,

whenever necessary or proper, be used for the furtherance of the purpose or purposes for

which the corporation was organized".2 "Non-profit" means that "no net income or asset

accrues to or benefits any member or specific person, with all the net income or asset devoted

to the institution's purposes and all its activities conducted not for profit" 3

Revenue Memorandum Circular (RMC) No. 51-2014 has clarified that in order for an

entity to qualify as a non-stock and/or non-profit corporation/association/organization exempt from income tax under Section 30 of the NIRC of 1997, as amended, its earnings or assets shall

not inure to the benefit of any of its trustees, organizers, officers, members or any specific

person. The following are considered "inurements" of such nature:

1.The payment of compensation, salaries, or honorarium to its trustees or

organizers; xxx.

In the submitted documents of ASIAN COLLEGE OF SCIENCE AND

TECHNOLOGY FOUNDATION, INC., it was disclosed that members of the Board of

Trustees are entitled to per diem/honorarium. The-Certification executed on October 04, 2018

by Corporate Treasurer, Claudine Gloria S.Lucente of ASIAN COLLEGE OF SCIENCE

AND TECHNOLOGY FOUNDATION, INC. states that:

"The trustees, officers and other executive of ASIAN COLLEGE OF SCIENCE AND TECHNOLOGY FOUNDATION,INC. do not receive their salaries, compensation or any emoluments except for a reasonable per

diem/honorarium"

2 Section 87. Corporation Code CIR vs.St.Luke's Medical Center. Inc..G.R.Nos.195909 and 195960 dated 26 Sentemher 2012

ASIAN COLLEGE OF SCIENCE AND TECHNOLOGY FOUNDATION, INC. PAGE30F3 SH30-0312-2020 JUN 0 3 2020

considered a distribution of the equity (including the net income) of ASIAN COLLEGE OF SCIENCE AND TECHNOLOGY FOUNDATION, INC.This is a form of private The payment of per diem/honorarium to the members of the Board of Trustees is

inurement which the law prohibits in the organization and operation of a non-stock, non-profit corporation. This act violates the requirement that no part of the net income or assets of the

corporation shall inure to the benefit of any individual or specific person. Thus, ASIAN

qualified as a non-stock, non-profit corporation under Section 30 (H) of the NIRC of 1997, as COLLEGE OF SCIENCE AND TECHNOLOGY FOUNDATION,INC.cannot be

amended.

this reason alone, completely exempt an institution from tax.34 Thus, "statutes granting tax Please bear in mind that, "being a non-stock and/or non-profit corporation does not, by

exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of tax exemption must be clearly shown and based on language in law too plain to be mistaken. Otherwise stated, taxation is the rule, exemption is the exception. The burden of proof rests upon the party claiming the exemption to prove that it is in fact covered by the exemption so claimed.35 (BIR Ruling No. 466-2014 dated November 19, 2014)

In view of the foregoing, the request of ASIAN COLLEGE OF SCIENCE AND TECHNOLOGY FOUNDATION, INC. to be exempted from income tax on its income as a Section 30 (H) corporation is hereby denied as it failed to prove that it is a non-profit

corporation.Therefore, ASIAN COLLEGE OF SCIENCE AND TECHNOLOGY

FOUNDATION, INC. shall be treated as a proprietary educational institution subject to ten

percent (10%) preferential rate pursuant to Section 27 (B) of the National Internal Revenue

Code of 1997, as amended.

Please be guided accordingly

Very truly yours,

Meusanr

Commissioner of Internal Revenue CAESAR R.DULAY

COPY FURNISHED: K-1-JAC 034121

REVENUE REGION NO.7-Quezon City Attention: Revenue District Office No. 40 -- Cubao, Quezon City

PHILIPPINE COUNCIL FOR NGO CERTIFICATION (PCNC) 6/F SCC Bldg., CFA-MA Compound, 4427 Interior Old Sta. Mesa Road, Sta. Mesa 1016 Manila

4 1bid. Quezon City and The City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation G.R.No.166408,6 Octoher

20081.