CLARIFICATIONS & ADDITIONAL INFORMATIONS ABOUT NON-STOCK, NON-PROFIT CORPORATIONS OR ORGANIZATIONS

Tonight, upon reading an article written by a Tax Manager of an Audit Firm in the Country stated that NON-STOCK, NON-PROFIT (NSNP) CORPORATIONS OR ORGANIZATIONS not really exempt from the payment of all taxes.
The writer stated that the grant of tax exemption  provided under the Constitution (Section 4(3), Article XIV of the Constitution) and the Tax Code may well be among the reasons why a many trustees and officers of Non-stock, Non-profit organizations are under the mistaken notion that their tax exemption is absolute.
In support, the writer stated  about the case of (Lladoc vs. Commissioner of Internal Revenue, 14 SCRA 292)  decided by the Supreme Court, it was held that the tax exemption of charitable and religious institutions under the Constitution refers only to real property exemption and not to other types of taxes.
The exemption privileges do not cover all types of income and activities. Income from properties, as well as from activities conducted for profit by NSNP corporations is subject to income tax. Section 30 of the Tax Code explicitly provides that “the income of whatever kind and character of the foregoing organizations from any of their properties, real or personal, or from any of their activities conducted for profit, regardless of the disposition made of such income, shall be subject to the tax imposed under this Code”. Because of this, income earned by a non-stock non-profit institution from the sale or lease of its real property is subject to tax. Interest income from bank deposits and yield from deposit substitutes are likewise subject to the final withholding taxes.
Likewise, income earned by the educational institutions from investments in shares of stock which is not deemed related to its purposes as an educational institution and is subject to income tax. Income earned from the sale or lease of real property or from fund raising activities although to be used exclusively in furtherance of the objectives and purposes of the organization are likewise, in general, taxable.
Both NSNP organizations and educational institutions are neither exempt from the liability to withhold taxes on their employees and other income payments that are subject to withholding tax under the regulations.
The author also recommends that when in doubt, a ruling may be secured from the BIR on whether certain income or receipts can be exempt or should be taxable. Exemptions from the general rules on taxability may also be obtained, in certain cases.


THE DECORATED GINGERBREAD MAN AND WOMAN

One of the gifts that I have received during the season of December 2010 was a decorated “Gingerbread Man and Woman.”

Through internet research, the Gingerbread figural biscuit-making was practiced in the 16th century and its first documentation was appeared in the court of Elizabeth I of England which was made and presented in the likeness of some of her important guests.

The Gingerbread Man and Woman was made with a soft molasses and ginger cookie decorated with gum drops, icing, chocolate and raisins.

Decorated Gingerbread Man and Woman

The maker of this gingerbread has considered the quality and artistry of the product which decided  me to make a documentation and posting it in my blog. For me, this is the best gingerbread I’ve ever tasted. I like dark cookies indeed.

In fact, this article was written just  to show my great appreciation to the person who  gave  this valuable gift.