BIR Ruling No. 582-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

Quezon City

Par. 3, Sec, 4, Art. XIV of the 1987

Constitution; Sections 30 (E and (H of

the NIRC of 1997,as amended; RMO

BIR Ruling,Nos.466-14 & 1111-18 Nos. 20-2013 and 44-2016

SH30-0582-2020

JAPAN PHILIPPINES INSTITUTE OF TECHNOLOGY- OCT 0 6 2020

CITY OF SAN JOSE DEL MONTE CAMPUS INC.

JAG Bldg.EVR Sapang Palay City of San Jose Del Monte Bulacan, Philippines

Attention: MS. JANET D.G. MORISHITA

Chairman/President

Gentlemen:

This refers to your letter dated September 15, 2019, applying on behalf of JAPAN PHILIPPINES INSTITUTE OF TECHNOLOGY-CITY OF'SAN JOSE DEL MONTE

CAMPUS INC. for the issuance of a certificate of tax exemption enjoyed by a non-stock corporation or association organized and operated exclusively for educational purposes under Section 30(H) of the Tax Code of 1997, as amended.

It is represented that JAPAN PHILIPPINES INSTITUTE OF TECHNOLOGY-CITY

OF SAN JOSE DEL MONTE CAMPUS INC., with BIR Taxpayer's Identification No. (TIN)

, is a non-stock, non-profit association duly organized and existing under the laws of the Kepublic of the Philippines; and that it is registered with the Securities and Exchange Commission (SEC) under Company Registration No.

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

Constitution states that:

"All revenues and assets of non-stock, non-profit educational institutions used

taxes and duties." actually, directly, and exclusively for educational purposes shall be exempt from

Similarly, Section 30 (H) of the Tax 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 non-stock and non-profit educational institution; xxx."

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

b) Its revenues are actually, directly and exclusively used for educational purposes. a) It is a non-stock, non-profit educational institution; and

Page 2 JPI TECHNOLOG!ES TRAINING AND SERVICES. INC. SH30-582-202

OCT 0 6:2020

trustees, or officers" and that any profit "obtained as an incident to its operations shall, whenever corporation was organized"" "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"-2 necessary or proper, be used for the furtherance of the purpose or purposes for which the "Non-stock" means "no part of its income is distributable as dividends to its members,

In the submitted documents of JAPAN PHILIPPINES INSTITUTE OF TECHNOLOGY-CITY OF SAN JOSE DEL MONTE CAMPUS INC.,it was disclosed that the Board of Trustees are entitled to reasonable per diems. The Treasurer's Affidavit/Certification

income) of JAPAN PHILIPPINES INSTITUTE OF TECHNOLOGY-CITY OF SAN JOSE requirement that no part of the net income or assets of the corporation shall inure to the benefit of a non-stock, non-profit educational institution under Section 30 (H) of the National Internal Revenue Code of i997, as amended. shows that the Trustees are entitled to receive reasonable per diems. The giving of per diems to the members of the Board of Trustees is considered as distribution of equity (including the net DEL MONTE CAMPUS INC. This is a form of private inurement which the law prohibits in the organization and operation of a non-stock, non-profit corporation. This act violates the any individual or specific person. Thus, JAPAN PHILIPPINES INSTITUTE OF TECHNOLOGY-CITY OF SAN JOSE DEL MONTE CAMPUS INC.cannot be qualified as

reason alone, completely exempt an institution from tax"3. Thus, "statutes granting tax 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 the exemption so claimed4. (BiR Ruling No. 466-2014 dated November 19, 2014) exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the burden of proof rests upon the party claiming the exemption to prove that it is in fact covered by Please bear in mind that, "being a non-stock and/or non-profit corporation does not, by this

income tax on its income as a Section 30(H) institution is hereby denied as it failed to prove that TECHNOLOGY-CITY OF SAN JOSE DEL MONTE CAMPUS INC. to be exempted from In view of the foregoing, the request of JAPAN PHILIPPINES INSTITUTE OF

regular corporation subject to thirty percent (30%) regular tax rate pursuant to Section 27(A) of the National Internal Revenue Code of 1997, as amended. it is anon-profitcorporation. Therefore, JAPAN PHILIPPINES INSTITUTE OF TECHNOLOGY-CITY OF SAN JOSE DEL MONTE CAMPUS INC. shall be treated as a

Please be guided accordingly.

Very truly yours,

aeaw

Commissioner of Internal Revenue CAESAR R. DULAY

036844 CC: Revenue Region No. 05 Attention: Revenue District Office No. 25B- Sta. Maria, Bulacan

Philippine Council for NGO Certification 6th Floor SCC Bldg., CFA-MA Cmpd., 4427 Interior old Sta. Mesa 1013 Manila K-

Section 87. Corporation Code Ibid Quezon City and The City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation [G.R.No. 166408. 6 October 2008]. CIR vs. St. Luke's Medical Center. Inc.. G.R. Nos. 195909 and 195960 dated 26 September 2012