BIR Ruling No. 353-2020

REPUBLICOF THE'PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OFINANCE

Quezon City

Section 30 (E) of the NIRC of 2013; RMC No. 051-14 BIR Ruling No. 466-2014 1997, as amended; RMO No. 20- CH200353-2020 JUN 2 5 2U20

ST.FRANCIS XAVIER HIGH SCHOOL OF LOPEZ JAENA,INC. Western Poblacion Lopez Jaena Misamis Occidental 7208

Attention :ELEONORA C. DIGAMON School Head

Madam:

of 1997, as amended. HIGH SCHOOL OF LOPEZ JAENA, INC. for tax exemption certificate being enjoyed by non-stock non-profit corporation or association under Section 30 (H) of the National Internal Revenue Code (NIRC) This refers to your letter dated August 22, 2018 applying on behalf of ST. FRANCIS XAVIER

BIR Taxpayer's Identification No. (TIN) under the laws of the Republic of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Company Registration No.; and that the purpose' for which the association was incorporated is "for the operation of Pre-School, Elementary and High School and to give sound, complete and Catholic Education". It is represented that ST.FRANCIS XAVIER HIGH SCHOOL OF LOPEZ JAENA,INC.with dated August 11, 1998, is a non-stock, non-profit association duly organized and existing and Certificate of Registration No. OCN

exempt from income tax in respect to income received by them as such. Section 30 (H) of the National amended, enumerates the non-stock and/or non-profit corporations/associations/ organizations that are Internal Revenue Code of 1997, as amended, provides, viz: In reply, please be informed that Section 30 of the National Internal Revenue Code of 1997, as

taxed under this Title in respect to income received by them as such: "Sec. 30. Exempt from Tax on Corporations. - The following organizations shall not be

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(H) A nonstock and nonprofit educational institution;

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be used for the furtherance of the purpose or purposes for which the corporation was organized".2 "Non- net income or asset devoted to the institution's purposes and all its activities conducted not for profit".3 profit" means that "no net income or asset accrues to or benefits any member or specific person, with all the officers" and that any profit "obtained as an incident to its operations shall, whenever necessary or proper, "Non-stock" means "no part of its income is distributable as dividends to its members, trustees, or

to the benefit of any of its trustees, organizers, officers, members or any specific person. The following are considered "inurements" of such nature: qualify as a non-stock and/or non-profit corporation/association/organization exempt from income tax under Section 30 of the National Internal Revenue Code of 1997, as amended, its earnings or assets shall not inure Revenue Memorandum Circular (RMC) No. 51-2014 has clarified that in order for an entity to

Amended Articles of Incorporation adopted on August 01, 2015.

CH30-0353-2020

ST.FRANCIS XAVIER HIGH SCHOOL OF LOPEZ JAENA,INC PAGE20F2 JUN 2 5 2020

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

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Certification by Corporate Treasurer Rev.Fr. Victor L.Serino ofST. FRANCIS XAVIER HIGH SCHOOL OF LOPEZ JAENA,INC.,dated September 11,2017 states that INC. it was disclosed that the members of the Board of Trustees are entitled to honorarium. Treasurer's In the submitted documents of ST. FRANCIS XAVIER HIGH SCHOOL OF LOPEZ JAENA

Rev. Fr. Mario Magcanam OTR, Mrs. Eleonora C. Digamon, OTR and Mrs. Virginia T. Razonable, COS do not receive any income, salaries or emoluments except the honorarium received during the Board meeting twice a year amounting to Two Thousand Pesos Only (P 2,000.00) in accordance to the Board Resolution No. 01 duly approved by the same. "That the Most Rev. Martin Jumoad, President, Rev. Fr. Victor L. Serino, CFO

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, ST. FRANCIS XAVIER INC. This is a form of private inurement which the law prohibits in the organization and operation of a non. HIGH SCHOOL OF LOPEZ JAENA, INC. cannot be qualified as a non-stock, non-profit corporation under Section 30 (H) of the National Internal Revenue Code of 1997, as amended. the equity (including the net income) of ST.FRANCIS XAVIER HIGH SCHOOL OF LOPEZ JAENA, The giving of honorarium to the members of the Board of Trustees is considered a distribution of

alone, completely exempt an institution from tax. 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. "5 (BIR Ruling No. 466-2014 dated November 19, 2014) Please bear in mind that, "being a non--stock and/or non-profit corporation does not, by this reason Thus, "statutes granting tax exemptions are construed

JAENA, INC. to be exempted from income tax on its income as a Section 30 (H) corporation is hereby In view of the foregoing,the request of ST.FRANCIS XAVIER HIGH SCHOOL OF LOPEZ

SCHOOL OF LOPEZ JAENA, INC. shall be treated as an ordinary corporation subject to thirty percent (30%) income tax rate pursuant to Section 27 (A) and other internal revenue taxes imposed by the National] denied as it failed to prove that it is a non-profit corporation. Therefore, ST. FRANCIS XAVIER HIGH Internal Revenue Code of 1997, as amended.

Please be guided accordingly.

Very truly yours.

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CAESAR R. DULAY Commissioner of Internal Revenue K-1-JAC COPY FURNISHED REVENUE REGION NO.16 -Cagayan De Oro City 035482 Q

Attention: Revenue District Office No. 100 -- Ozamis City, Misamis Occidental

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