BIR Ruling No. 270-2016

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

RE Quezon City

Section 30 of the Tax Code of 1997.as

amended BIR Ruling No.126-14 BIR Ruling No.357-13

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SAND AND WATER LEARNING CENTER,INC

No.17 Amethyst Street, Union Village

Bagumbong.Caloocan City

Attention:MARISSA EJERCITO-BORINES

President/School Directress

Gentlemen:

This refers to your letter dated March 27. 2014 requesting for tax exemption pursuant to Section 30 (H) of the Tax Code of the Philippines, as amended.

It is represented that Sand and Water Learning Center, Inc. with Taxpayer's

organized under the laws of the Philippines; that it is registered with the Securities Identification No. is a non-stock, non-profit corporation duly

and Exchange Commission (SEC) under Registration No. and with

SEC Certificate of Incorporation dated July 24, 2013: that it is recognized by the

government and permitted by the Department of Education (DEPED) in accordance with DEPED-NCR PERMIT No. P-111. R-1s. 2014 to operate a Nursery/Kindergarten Course for school year 2014-2015 only; and purposes for which

it was incorporated are the following:

1) To establish a Private Pre-School Educational Services that will stimulate the child's critical thinking, discovering and decision

2) To master the head-muscular coordination so the child can face the Physical challenges of the society: making:

3) To instill Filipino values for self-identity to venture out in the

4) To know his interpersonal connection between himself and the society;

people around him: and

5) To imbibe godly works and unconditional love.

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Sand and Water Learning Center, Inc. Page 2 of 3

In reply, please be informed that your request for tax exemption as a non-stock

non-profit corporation under Section of the Tax Code of 1997.as amended,is hereby

denied for lack of factual basis.

Notwithstanding that the Articles of Incorporation states that the Sand and

Water Learning Center, Inc. is a non-stock, non-profit corporation, it has to prove

that it is really a corporation organized and operated as contemplated under Section

30 of the Tax Code of 1997, as amended.

Being registered as a non-stock and non-profit corporation does not, by this

reason alone, completely exempt an institution from tax. (Commissioner of Internal Revenue vs. St. Luke's Medical Center, Inc., G.R. No. 195909 & G.R. No. 195960. 26

September 2012)

Supreme Court in the case of Ouezon City and The City Treasurer of Quezon City vs. Note that tax exemptions are never presumed and thus, as ruled by the

ABS-CBN Broadcasting Corporation (G.R. No. 166408 dated October 6, 2008):

"He who claims an exemption from his share of common burden must justify his claim that the legislature intended to exempt him by unmistakable terms. For exemptions from taxation are not favored in law, nor are they presumed. They must be expressed in the clearest and most unambiguous language and not left to mere implications. It has been held that "exemptions are never presumed, the burden is on the claimant to establish clearly his right to

exemption and cannot be made out of inference or implications but must be laid beyond reasonable doubt". In other words, since taxation

is the rule and exemption the exception. the intention to make an exemption ought to be expressed in clear and unambiguous terms.

revenue taxes imposed by the Tax Code of 1997, as amended. corporation subject to regular corporate income tax and the applicable internal Hence, Sand and Water Learning Center, Inc. shall be treated as an ordinary

renders services, and any person who imports goods shall be subject to the value- added tax (VAT) imposed in Sections 106 to 108 of the same Code. in the course of trade or business, sells, barters, exchanges, leases goods or properties. Moreover, Section 105 of the Tax Code of 1997 provides that any person who.

thereto, by any person regardless of whether or not the person engaged therein is a non-stock. non-profit private organization (rrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or pursuit of a commercial or an economic activity, including transactions incidental The phrase "in the course of trade or business" means the regular conduct or

government entity.

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Accordingly, if Sand and Water Learning Center, Inc. is engaged in the sale of goods or services in the course of a business pursuit. including transactions incidental thereto, in general, it shall be liable for VAT.

Please be guided accordingly

Very truly yours.

KIM S.JACINTO-HENARES Commissioner of Internal Revenue

K-I-JRC 042221

cc: Regional Director JUN 2 O 2016

Revenue Region 5-Caloocan City