RMC No. 65-2008: Clarifies the business taxation on the activities undertaken by the Bangko Sentral ng Pilipinas in pursuance of its mandates as the independent central monetary authority of the Republic of the Philippines

Key points

1. BSP tax exemption under RA No. 7653. Section 125 of RA No. 7653 exempted the BSP from national and local taxes, fees, charges and assessments for five (5) years from approval of the Act. The law intends taxes to be imposed on the BSP after the exemption expires, on July 3, 1993.
2. Governmental and proprietary functions. Taxation of the BSP is subject to the inherent and constitutional limits on the power to tax. Only revenues from governmental functions are exempt, while proprietary functions are taxed like those of an ordinary taxpayer.
3. Business taxes. The BSP is exempt from business taxes on revenues and receipts from essential governmental functions. It is subject to business taxes when it exercises purely proprietary functions.
4. Gross Receipts Tax and VAT. Performing proprietary functions still does not make the BSP liable for Gross Receipts Tax under Sections 12 and 122 of the Tax Code, because it is not among the taxpayers named as liable. If in those functions it engages in any transaction listed in Section 105, it is liable to VAT under Sections 106 to 108.

Who is affected

• Bangko Sentral ng Pilipinas

Deadlines and effectivity

• Five-year exemption from approval of RA No. 7653, ending July 3, 1993