BIR Ruling No. 583-2020

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE Quezon City

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

the NIRC of 1997, as amended; RMO Constitution; Sections 30 (E) and (H) of

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

SH30-0583 -2020

Poblacion, Sta. Maria Bulacan, Philippines AND SERVICES, INC. JM Square Bldg., M. De Leon St. JPI TECHNOLOGIES TRAINING OCT 0 6 2020

Attention: MS. JANET D.G. MORISHITA

President

Gentlemen:

TECHNOLOGIES TRAINING AND SERVICES, INC. for the issuance of a certificate of tax for educational purposes under Section 30(H) of the Tax Code of 1997, as amended. exemption enjoyed by a non-stock corporation or association organized and operated exclusively This_refers to your letter dated September 15, 2019, applying on behalf of JPI

BIR Taxpayer's Identification No. (TIN) It is represented that JPI TECHNOLOGIES TRAINING AND SERVICES,INC.,with , is a non-stock, non-profit association

registered with the Securities and Exchange Commission (SEC) under Company Registration No. duly organized and existing under the laws of the Republic of the Philippines; and that it is

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

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

Similarly, Section 30 (H) of the Tax Code of 1997, as amended, provides, viz:

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 non-stock and non-profit educational institution; xxx."

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

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

Q

Page 2 JPI TECHNOLOGIES TRAINING AND SERVICES, INC. SH30F0583-202 OCT 0 6 2020

necessary or proper, be used for the furtherance of the purpose or purposes for which the 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 "Non-stock" means "no part of its income is distributable as dividends to its members,

In the submitted documenus of3Pr TENYINOLOOIE MRAIUIU IUN Q

INC., it was disclosed that the Board of Trustees are entitled to reasonable per diems. The Treasurer's Affidavit/Certification shows that the Trustees may 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 income) of JPI TECHNOLOGIES TRAINING AND SERVICES

person.Thus,JPI TECHNOLOGIES TRAINING AND SERVICES,INC.cannot be qualified INC. This is a form of private inurement which the law prohibits in the organization and the net income or assets of the corporation shall inure to the benefit of any individual or specific operation of a non-stock, non-profit corporation. This act violates the requirement that no part of

as a non-stock, non-profit educational institution under Section 30 (H) of the National Internal Revenue Code of 1997, as amended.

reason alone, completely exempt an institution from tax3. Thus, "statutes granting tax 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 this

burden of proof rests upon the party claiming the exemption to prove that it is in fact covered by too plain to be mistaken. Otherwise stated, taxation is the rule, exemption is the exception. The taxing authority. A claim of tax exemption must be clearly shown and based on language in law the exemption so claimed'4. (BIR Ruling No. 466-2014 dated November 19, 2014)

SERVICES, INC. to be exempted from income tax on its income as a Section 30(H) institution corporation subject to thirty percent (30%) regular tax rate pursuant to Section 27(A) of the TECHNOLOGIES TRAINING AND SERVICES, INC. shall be treated as a regular is hereby denied as it failed to prove that it is a non-profit corporation. Therefore, JPI National Internal Revenue Code of 1997, as amended. In view of the foregoing, the request of JPI TECHNOLOGIES TRAINING AND

Please be guided accordingly.

Very truly yours,

Aaesawa

CC: Revenue Region No. 05 Attention: Revenue District Office No. 25B- Sta. Maria, Bulacan Commissioner of Internal Revenue CAESAR R. DULAY 036842

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

Section 87.Corporation Code 1hia CfR vs. St. Luke's Medicat Center. (nc.. G.R. Nos. 195909 and (95960 dated 26 September 20(2