BIR Ruling No. 314-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

1 BUREAU OF INTERNAL REVENUE

PPI Quezon City

Section 30(H of the NIRC of

1997. as amended RMO No. 44-2016: RMC No.051-14 BIR Ruling No. 466-2014 o oe 32020

Highway Ibayo, Marilao, Bulacan ACCESS MARILAO BULACAN COMPUTER AND TECHNICAL COLLEGES, INC. 2nd and 3rd Flr. Goldstar Apartelle 346 McArthur

Attention : CARMELA S.CUNANAN

Authorized Representative

Madam:

BULACAN COMPUTER AND TECHNICAL COLLEGES,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 undated letter applying on behalf of ACCESS MARILAO

non-profit association duly organized and existing under the laws of the Republic of the Philippines; and that it is registered with the Securities and Exchange Commission (SEC) under Company Registration No. (TIN) TECHNICALCOLLEGES,INC.withBIRTaxpayer'sIdentificationNo It is represented that ACCESS MARILAO BULACAN COMPUTER AND and Certificate of Registration dated October 23, 2014, is a non-stock

organizations that are exempt from income tax in respect to income received by them as such. Section 30 (H) of the National Internal Revenue Code of 1997, as amended, provides, viz: 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

"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 nonstock and nonprofit educational institution:

XXX XXX XXX

"Non-stock" means "no part of its income is distributable as dividends to its members,

trustees, or officers" and that any profit "obtained as an incident to its operations shall.

whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized"? "Non-profit" means that "no net income or asset

Section 87.Corporation Code

ACCESS MARILAO BULACAN COMPUTER AND TECHNICAL COLLEGES, INC. PAGE2OF3 S 10 0 3 1h -2Z0 JUN 0 9 2020

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" ?

Revenue Memorandum Circular (RMC) No. 51-2014 has clarified that in order for an

entity to qualify as a non-stock and/or non-profit corporation/association/organization exempt

from income tax under Section 30 of the National Internal Revenue Code of 1997, as amended. its earnings or assets shall not inure to the benefit of any of its trustees, organizers, officers, members or any specific person. The following are considered "inurements" of such nature:

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

organizers; xxx.

In the submitted documents of ACCESS MARILAO BULACAN COMPUTER

AND TECHNICAL COLLEGES, INC., it was disclosed that the members of the Board of

Trustees are receiving compensation/salaries. The Certification submitted by the corporate treasurer of ACCESS MARILAO BULACAN COMPUTER AND TECHNICAL

COLLEGES, INC.. states that:

Bldg., 5_West Capitol Drive, San Rafael, Brgy. Kapitolyo, Pasig City, under oath, CERTIFY: Computer and Technical Colleges, Inc. and with office address at 4th Floor Fadi "I, FRANCIS RYAN T. ZARATE, Treasurer of Access Marilao Bulacan

A. Income.

B. Compensation/salaries; B-1. Trustees

The giving of compensation/salary to the members of the Board of Trustees is

considered a distribution of the equity (including the net income) of ACCESS MARILAO

BULACAN COMPUTER AND TECHNICALCOLLEGES,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 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, ACCESS

MARILAO BULACAN COMPUTER AND TECHNICAL COLLEGES,INC.cannot be

qualified as a non-stock, non-profit corporation under Section 30 (H) of the National Internal

Revenue Code of 1997, as amended.

Please bear in mind that, "being a non-stock and/or non-profit corporation does not,

by this reason alone, completely exempt an institution from tax. "3 Thus, "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. "4 (BIR Ruling No. 466-2014 dated November 19, 2014)

In view of the foregoing, the request of ACCESS MARILAO BULACAN

COMPUTER AND TECHNICAL COLLEGES,INC.to be exempted from income tax on

its income as a Section 30 (H) corporation is hereby denied as it failed to prove that it is a non-

profit corporation. Therefore, ACCESS MARILAO BULACAN COMPUTER AND

TECHNICAL COLLEGES,INC.shall be treated as an ordinary corporation subject to thirty

% CIR vs. St. Luke's Medical Center, Inc., G.R. Nos. 195909 and 195960 dated 26 September 2012

+Quczon City and The City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation [G.R.No. 166408, 6 October 3 Ibid.

2008

PAGE 3OF 3 ACCESS MARILAO BULACAN COMPUTER AND TECHNICAL COLLEGES, INC. SHh)1314-2020 JUN 0 9 2020

profit corporation.ThereforeACCESS MARILAO BULACAN COMPUTER AND TECHNICAL COLLEGES,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 imposed by the National Internal Revenue Code of 1997, as amended. Please be guided accordingly.

Very truly yours.

1aesomw

COPY FURNISHED: K-1-JAC Commissioner of Internal Revenue CAESAR R.DULAY 033689

REVENUE REGION NO. 5 - Caloocan City Attention: Revenue District Office No. 25B -- Sta. Maria, Bulacan

6/F SCC Bldg., CFA-MA Compound, 4427 Interior Old Sta. Mesa Road, Sta. Mesa 1016 Manila PHILIPPINE COUNCIL FOR NGO CERTIFICATION (PCNC)