Tax exemption for educ institutions
THE Bureau of Internal Revenue (BIR) has affirmed the tax-exempt status of non-stock, nonprofit educational institutions while cutting down on the requirements for the confirmation of its tax exemption as conferred by the Constitution.
This is in pursuant to the mandate of President Rodrigo Duterte to cut bureaucratic red tape, speed up processing of transactions, and ease the burden of taxpayers and others who transact business with government offices.
The tax agency issued Revenue Memorandum Order (RMO) No. 44-2016 which expressly reduced the number of requirements for the processing of applications for the issuance of a confirmatory ruling on the tax-exempt status of educational institutions from the previous number of eleven (11) under RMO No. 20-2013 to six (6).
Under RMO No. 442016, all non-stock, non-profit educational institutions shall only submit the following documentary requirements to have their application processed:
1) Original copy of the application letter for issuance of tax exemption ruling;
2) Certified true copy of the Certificate of Good Standing issued by the Securities and Exchange Commission;
3) Original copy of the Certification under Oath of the Treasurer
as to the amount of the income, compensation, salaries or any emoluments paid to its trustees, officers and other executive officers;
4) Certified true copy of the Financial Statements of the corporation for the last three years;
5) Certified true copy of government recognition/permit/ accreditation to operate as an educational institution issued by the Commission on Higher Education (CHED), Department of Education (DepEd), or Technical Education and Skills Development Authority (Tesda); and
6) Original copy of the Certificate of utilization of annual revenues and assets by the Treasurer or his equivalent of the non-stock, non-profit educational institution.
The Tax Exemption Rulings or Certificates of Tax Exemption issued to non-stock, non-profit educational institutions shall remain valid and effective, unless recalled for valid grounds. The said non-stock, non-profit corporations are not required to renew or revalidate the Tax exemption rulings previously issued to them. Under RMO No. 20-2013, the validity period is three (3) years from the date of the effectivity specified in the ruling.