BIR Ruling No. 584-2020

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Section 30 (H) of the NIRC of 1997, as amended; RMO No. 44-2016: SH30-0584-2020 OCT 0 6 2020

Mercury Rd., Pilar Village, Las Pinas, Metro Manila OUR LADY OF PILAR MONTESSORI CENTER,INC.

Attention:ANTHONY EDWARD V.GARCIA

President

Gentlemen:

PILAR MONTESSORI CENTER, 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) of 1997, as amended. This refers to your letter dated April 29, 2019, applying on behalf of OUR LADY OF

sciences in the: pre-school.and elementary.levels." BIR Taxpayer's Identification No. (TIN) association duly organized and existing under the laws of the Republic of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Company "establish, maintain, operate and conduct a co-educational institution or learning in arts and Registration No. It is represented that OUR LADY OF PILAR MONTESSORI CENTER, INC. with ; and that the purpose for which the association was incorporated is to is a non-stock, non-profit

Constitution states that: In reply, please be informed that paragraph 3, Section 4, Article XIV of the 1987

institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties. " (Emphasis supplied) "All revenues and assets of non-stock, non-profit educational

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

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

XXX XXX XXX

(Emphasis supplied) (H) A non-stock and non-profit educational institution; x x x"

from tax as provided under Revenue Memorandum Order (RMO) No. 44-2016 dated July 25 2016: to wit: Moreover, there are two requisites in order for an educational institution to be exempt

a)It is a non-stock, non-profit educational institution; and

OUR LADY OF PILAR MONTESSORI CENTER, INC. PAGE 2 OF 2 SH30-0584-2020 OCT 0 6 2020

b) Its revenues are actually, directly and exclusively used for educational purposes. (Emphasis supplied)

institution to be exempt from income tax pursuant to the provisions of paragraph 3, Section 4. Article XIV of the 1987 Constitution, in relation to Section 30 (H) of the National Internal non-profit educational institution. However, in the instant case, the submitted Articles of Revenue Code of 1997, as amended, and RMO No. 44-2016, is to be organized as a non-stock. Under the above quoted provisions, one of the requirements for an educational

its registration with the SEC is only as a non-stock corporation. Consequently, it cannot be Incorporation of OUR LADY OF PILAR MONTESSORI CENTER,INC. disclosed that qualified as a non-profit educational institution under Section 30 (H) of the National Internal] Revenue Code of 1997, as amended. Therefore, it 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 Internal Revenue Code of 1997, as amended.

Please bear in mind that, "statutes granting tax 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.

Please be guided accordingly.

Very truly yours,

eesalwa

...Commissioner of Internal Revenue CAESAR R. DULAY

K-1-JAC 036839

C

Quezon City and The City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation [G.R.No. 166408, 6 October

2008].