BIR Ruling No. 77-2020

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Section 30H) of the NIRC of 20-2013: RMC No. 051-14 BIR Ruling No. 466-2014 1997, as amended; RMO No. SH-O092020

JAN 1 6 2020

ST.VINCENTS HIGH SCHOOL OF BONIFACIO MISAMIS OCCIDENTAL,INC. Poblacion Bonifacio, Misamis Occidental 7215

Attention: NELLIE A. OMAMBAC

School Head

Gentlemen:

HIGH SCHOOL OF BONIFACIO MISAMIS OCCIDENTAL,INC.for tax exemption certificate being enjoyed by non-stock, non-profit corporation or association under Section 3o] (H) of the National Internal Revenue Code (NIRC) of 1997, as amended. This refers to your letter dated July 19, 2018, applying on behalf of ST. VINCENT'S

Republic of the Philippines; that it is registered with the Securities and Exchange Commission is a non-stock, non-profit association duly organized and existing under the laws of the association was incorporated are: MISAMIS OCCIDENTAL,INC.with BIR Taxpaver's Identification No.(TIN) (SEC) under Company Registration No. It is represented that ST.VINCENT'S HIGH SCHOOL OF BONIFACIO and Certificate of Registration No. -;: and that the purposest for which the dated February 18,1999

1.To open a school for both sexes and therein to teach the arts, sciences and 2 To organize, establish, maintain and conduct a progressive institution of other studies embraced in basic education:

and for the recognition thereof by the Department of Education, Culture learning, of high academic standing which will emphasize Christian research and to this end, operate a school giving pre-school, elementary. date and modern educational theories and methods set by the government Spiritual and Cultural development, moral character and scientific secondary courses, scientific and artistic courses in accordance with up-to- and Sports.

4 by deeds, grants devices, bequest or gifts, for scientific or educational To administer gifts or bequests which may be acquired, accepted and/or To accept and/or receive contributions, donations, and/or endorsement from corporate members, sympathizers, church members, or from the public purposes.

received as endowments for the promotion of the aims of the school, and to manage, use, and take charge of all income derived therefrom and use the Same according to the purpose and in the manner specified by the donors. In furtherance of the purpose, to invest and deal with money of the school

in such a manner as from time to time may be determined, provided that the

3H-O092020

ST.VINCENTS HIGH SCHOOL OF BONIFACIO MISAMIS OCCIDENTAL,INC PAGE 2 OF 3 JAN 1 6 2020

6 To engage the service of such officers,employees, workers,professional or profits derived from said undertaking shall not inure to any of the officers but shall be exclusively for the maintenance of the school.

agents as may be desired or needed in the conduct of the affairs of the

school: To perform all and everything necessary and proper for the attainment of the purpose of the school or the furtherance of any of the powers above set forth.

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

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 organizations

XXX XXX XXX

(H) A nonstock and nonprofit educational institution; '

XXX XXX XXX

to the institution's purposes and all its activities conducted not for profit".3 trustees, or officers" and that any profit "obtained as an incident to its operations shall, 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 whenever necessary or proper, be used for the furtherance of the purpose or purposes for "Non-stock" means "no part of its income is distributable as dividends to its members.

person. The following are considered "inurements" of such nature: not inure to the benefit of any of its trustees, organizers, officers, members or any specific 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 Revenue Memorandum Circular (RMC) No. 51-2014 has clarified that in order for an

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

organizers; xxx.

In the submitted documents of ST.VINCENTS HIGH SCHOOL OF BONIFACIO MISAMIS OCCIDENTAL, INC., it was disclosed that Board of Directors are entitled to Honoraria. Treasurer's Certification by Corporate Treasurer Rev. Fr. Victor L. Serino of ST VINCENTS HIGH SCHOOL OF BONIFACIO MISAMIS OCCIDENTAL.INC.dated September 14, 2017, states that:

"That the Most Rev. Martin Jumoad, President, Rev. Fr. Victor L Serino, CFO, Rev. Fr. Francisco Villamor Jr, OTR, Mr. Florentino T. Castro, 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 (P2,000.00) in accordance to the Board Resolution No. O1 duly approved by the same.

2Section 87, Corporation Code

ST.VINCENTS HIGH SCHOOL OF BONIFACIO MISAMIS OCCIDENTAL, INC PAGE3OF3 JAN 1 6 2025 SH-009-2020

be qualified as a non-stock, non-profit corporation under Section 30 (H) of the NIRC of 1997, distribution of the equity (including the net income) of ST.VINCENTS HIGH SCHOOL which the law prohibits in the organization and operation of a non-stock, non-profit OF BONIFACIO MISAMIS OCCIDENTAL,INC.This is a form of private inurement 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. as amended. VINCENT'S HIGH SCHOOL OF BONIFACIO MISAMIS OCCIDENTAL,INC.cannot The giving of honoraria to the members of the Board of Directors is considered a

this reason alone, completely exempt an institution from tax.4 Thus,"statutes granting tax taxing authority. A claim of tax exemption must be clearly shown and based on language in covered by the exemption so claimed.35 (BIR Ruling No. 466-2014 dated November 19, 2014) 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 exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the Please bear in mind that, "being a non-stock and/or non-profit corporation does not, by

profitcorporation.ThereforeST.VINCENTS HIGH SCHOOLOF BONIFACIO MISAMIS OCCIDENTAL, 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 BONIFACIO MISAMIS OCCIDENTAL,INC. to be exempted from income tax on its imposed by the NIRC of 1997, as amended. income as a Section 30 (H) corporation is hereby denied as it failed to prove that it is a non- In view of the foregoing, the request of ST. VINCENT'S HIGH SCHOOL OF

Please be guided accordingly.

Very truly yours,

1ewanwa

K-1-JAC Commissioner of Internal Revenue CAESAR R.DULAY 032088

COPY FURNISHED:

REVENUE REGION NO. 18 - Koronadal City Attention: Revenue District Office No. 107 -- Cotabato City

6/F SCC Bldg., CFA-MA Compound. PHILIPPINE COUNCIL FOR NGO CERTIFICATION (PCNC)

Sta. Mesa 1016 Manila 4427 Interior Old Sta. Mesa Road,

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

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